Your superannuation basics
This is a basic guide about:
What is superannuation?
Superannuation, or 'super', is money put aside by your employer over your working life for you to live on when you retire from work.
Super is important for you, because the more you save, the more money you will have for your retirement.
You can only withdraw your super money in certain circumstances – for example, when you retire or turn 65 years old.
How do I save super?
For most people, your employer pays money – ‘contributions’ – into a super account for you. This is called the ‘super guarantee’. They pay these contributions on top of your salary and wages. There are laws about how much super your employer must pay.
Generally, your employer must pay super for you if you are:
18 years old or over, and are paid $450 or more (before tax) in a calendar month
under 18 years old, being paid $450 or more (before tax) in a calendar month and work more than 30 hours in a week.
This applies whether you work casual, part-time or full-time hours, and if you are a temporary resident. You may also be eligible if you are a contractor who is paid primarily for labour, even if you have an Australian business number (ABN).
How is money paid into my super?
From 1 July 2014, your employer is required to pay a minimum of 9.5% of your ordinary time earnings into super. This is set to gradually rise over the coming years.
Ordinary time earnings are what you generally earn for ordinary hours of work, including over-award payments, certain bonuses, allowances, and some paid leave. Payments for overtime hours are generally not included in ordinary time earnings.
You can also add your own money into your super savings, and sometimes the Australian Government puts money in too.
What if my employer is not paying the correct super?
Talk to your employer. Ask how often they are paying your super, into which fund they are paying it, and how much they are paying.
You can check your last Member statement from your super fund or contact the fund to confirm whether your employer has paid your super.
If you still believe your employer is not paying you super you're entitled to, you can phone ATO on 13 10 20.
Should I be wary of promoters offering early access to super?
Beware of promoters offering various plans to gain early access to your super savings before you retire. The promoters of these plans will tell you they can help you access your super savings for reasons such as paying off debts, buying a house or car, or even going on holiday. These schemes are illegal and heavy penalties apply if you participate.
If you want to know more about super, visit ato.gov.au/super or phone us on 13 10 20.
If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call.