Superannuation is a way of saving for your retirement. By saving small amounts of money now, you can make sure you have enough to live on when you’re older.
Generally, if you have a job, your employer has to put money in to a superannuation account for you under the superannuation guarantee. This money should come from your employer directly, not from your pay packet. However, if you want to put extra money in to your superannuation yourself, you can.
The money put in to your superannuation account gets invested by the fund on your behalf, and is yours to use when you retire.
The superannuation guarantee covers full-time, part-time and casual employees.
Generally, it means that if you are aged 18 or older and get paid $450 or more in a month, your employer must pay superannuation into a superannuation account for you. If you work for not more than 30 hours a week, and you are either under 18 years of age or the work is wholly or principally of a domestic or private nature, your employer is not required to pay superannuation for you.
If you are paid under an award, it may be part of the award agreement that your employer pays superannuation for you, even if you earn less than $450 a month.
If you are not an Australian resident or are working outside of Australia for an overseas employer, there are some uncommon situations where your employer might not pay superannuation for you. For more information, call our information line on 13 10 20.
Your employer generally must contribute an amount equal to 9% of your wage to your superannuation fund. This should be in addition to the money you get paid. Employers must make this payment to your superannuation account quarterly – those that don’t can be penalised.
Ask your employer or superannuation fund for information on how to make extra payments to your superannuation. If you make extra payments, you may be eligible for the Superannuation co-contribution, where the Australian Government will also contribute to your superannuation.
Superannuation is a good way to save for a number of reasons:
- You can save a little bit at a time over a long period.
- It’s a long-term investment. Because superannuation funds combine everyone’s small amounts into a large pool, they can often get better investment rates.
- Superannuation is taxed by the government at a lower rate than other investments or salary.
Generally you cannot get your superannuation until you reach your earliest retirement age – which is 60 for anyone born after 30 June 1964.
If you enter Australia on an eligible temporary resident visa you can get back any superannuation accumulated while you were here (minus tax) after you leave.
This option is not available if you are a permanent resident or have the option of retiring in Australia. This includes New Zealand citizens.
For more information, phone our information line on 13 10 20 or refer to:
Last Modified: Thursday, 24 April 2008
Subscribe
