Superannuation, or ‘super’ as it’s more commonly known, is one of the more commonly misunderstood parts of working life. For many Australians, their super will be their main form of retirement income. It is a long-term investment that is designed to help you save to enjoy the life you want in retirement.
How does it work?
If you work for a company or an organisation, your employer must contribute a minimum amount to your super account.1 Currently, this amount is 9.5% of your Ordinary Time Earnings or OTE. The Australian Taxation Office website has more information about what is included and excluded from OTE. The amount that your employer needs to contribute is known as the Super Guarantee or SG. If you are self-employed, it’s up to you how much of your income you choose to set aside for super.
In addition to the amount your employer contributes, you can also add some of your own money so that you will have more to live off in your retirement. The Government sets limits on the annual amount of contributions that can be made before extra tax is payable.
When can I access my super?
In most cases you will need to you have retired and reached your preservation age. Your preservation age depends on when you were born as shown in the table below.
|Date of birth
||Preservation age (years)
| Before 1 July 1960
|1 July 1960 - 30 June 1961
| 1 July 1961 - 30 June 1962
|1 July 1962 - 30 June 1963
| 1 July 1963 - 30 June 1964
|After 30 June 1964
1 Generally, your employer must pay super for you if you are:
- 18 years or over and are paid $450 or more before tax in a calendar month; or
- Under 18 years and being paid $450 or more before tax in a calendar month and you work more than 30 hours in a week.