Superannuation

Superannuation—often just called ‘super’—is really important but can be really confusing!

The simplest way to understand it, is that it’s money you save for your future. It is the money you will live on once you retire. The more money you have set aside, the more comfortable and secure you’ll be when you’re old and grey!

Super is the best way to save for retirement because you pay less tax on the money that goes in, and it grows over time.

If you earn $450 or more before tax in a month, and you are:

  • 18 or older

or

  • under 18 and work more than 30 hours a week

then your boss must pay super for you to a super fund.

Though there are changes coming. From 1 July 2022, you will not have to earn $450 per month to be eligible to be paid super.

You can also add extra money to your super on top of what your boss pays you. This will help it grow even quicker.

If one day you start your own business and you’re the boss, it’s important you pay yourself super too.

Read more about working and getting paid

You generally don’t get access to this money right away, at least not until you’re 60 years old! But you will see it growing in your super account over the years.

Getting paid super

Super is a part of your pay but is paid into your super account. It will be at least 10% of your normal income. For example, earning $500 a month means $50 will be paid into your super account.

Everyone will get a choice about what super fund they use.

Your boss will either give you a printout of a Superannuation Standard Choice Form or ask you to fill it in online through a myGov account. If you don’t choose a super fund, your boss will choose one for you. You only need to do this when you first start a new job.

You can see the form on the Australian Taxation Office (ATO) website:

Don’t have a myGov account? Services Australia explains the process to set one up:

If you think you should be getting super, check your payslip and your super account to see whether your boss is paying it.

Read more about payslips

The ATO website explains what to do if your boss isn’t paying super when they should be:

Choosing a super fund

A super account is similar to a savings account. You open a super account with a company called a ‘super fund’. The money your boss pays into the super account is invested by the fund to make more money. The money they make off those investments is put into your super account and this is how your super grows. You’ll also earn more money through compound interest.

There are many super funds and they’re all different. Some are open for anyone to join; some you need to work in a specific type of industry. They all charge different fees and earn different amounts of money from their investments.

You should compare different super funds so you know exactly what you’re choosing.

You can compare super funds using the Australian Government’s YourSuper comparison tool:

The Australian Government website Moneysmart explains what you should pay attention to when choosing a super fund:

Your super account will follow you and you don’t have to open a new one with every new job. But you can if there’s a better suited account available to you, so make sure you check when you change jobs.

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