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How Superannuation Works in Australia (and Can You Take it With You When You Leave)?

When you start a new job, you might come across something known as ‘superannuation’. To help you understand how superannuation works in Australia, how much superannuation is paid and what happens to your superannuation when you leave Australia, we’ve put together a handy guide.

What is superannuation?

Superannuation – more commonly known as super in Australia – is effectively a personal retirement fund. Under Australian law, most employers are required to pay a percentage of your salary into a super fund on your behalf. Your super is set aside during your working life and usually able to be accessed when you retire.

This is not by choice; employers cannot decide whether they want to pay super or not. All employers are required to pay super to an employee if the employee is entitled to it.

Smart tip: Even if you are working as a freelancer or contractor, you may be entitled to super. Read more here.

Do international students get superannuation?

The answer is generally YES, provided you meet the following conditions under the superannuation guarantee.

How much superannuation do employers have to pay?

Employers have to pay super contributions of 9.5 per cent of an employee’s ordinary time earnings if an employee is paid $450 or more before tax in a month, and is:

  • Over 18 years old, or
  • Under 18 years old and works over 30 hours a week

This applies to full-time, part-time and casual employees, including temporary residents such as international students.

Smart tip: If you are confused about whether you are entitled to super contributions from your employer, use the Australian Taxation Office’s (ATO) ‘Am I entitled to super?’ tool.

How does superannuation work in Australia?

Once you ascertain whether you are entitled to super, you are required to nominate a super fund to your employer. If you do not do this, your employer will choose a default fund to deposit your super contributions.

Your employer will make direct payments to this super fund. The fund will then invest your money in things like shares, property and managed funds. Generally, you’re able to choose where your super is invested and how aggressive you’d like your investment strategy to be. Super funds may also automatically provide certain types of insurance, like life insurance or income protection insurance.

Many employers will pay super during every pay cycle. However, they are allowed to pay super once every three months. It might be worth asking your employer about their super payment schedule so that you can check your account accordingly.

Which superannuation is best? How do I choose a super fund?

Most people can choose the super fund they want. Your employer will give you a superannuation standard choice form to fill out when you start working for them.

There are lots of super funds to choose from, and each one offers different benefits and services. When looking for a fund, look at the administrative and other costs, along with the benefits that best suit your needs. You can find and compare almost all the super funds in Australia using comparison tools by Canstar or Finder.

Smart tip: You don’t need a new super fund every time you start a new job. Instead, you can choose to have your super contributions paid into your current fund. This is also the case if you have more than one job. Keeping one super fund helps save on fees and charges.

Do I have more than one super account?

It is possible – especially if you have more than one job, or have worked in different casual and part-time jobs. Sometimes, using an employer’s default super fund with each new job results in employees ending up with several super funds. This can make it difficult to keep track of your super and also means paying fees across multiple funds.

Smart tip: You can view and consolidate your existing super funds through your myGov account. The best way to ensure all of your funds are logged is by providing your Tax File Number (TFN) to your employer and/or super fund.

What if my employer is not paying the correct super?

If you have used ATO’s ‘Am I entitled to super?’ tool and believe your employer is not paying the correct amount of super, or possibly not paying it at all, the first step is to talk to them. Ask your employer whether they are paying super and check whether it’s going in the correct fund. You should always check your super statement from your super fund to verify this.

If your employer doesn’t give any details or refuses to pay super, you can report them to the ATO.

Can I take my super with me when I leave Australia?

Any super contributions paid by your employer will remain in your super fund while you are in Australia. However, as an international student, you are eligible to claim that super when you leave the country. This process is called the departing Australia superannuation payment (DASP).

For more details, our article on taking your super home with you outlines everything you need to know.

Smart tip: Start this process before you leave Australia, as some documents may require local certification.

Where can I go for help with my superannuation?

  • If you want to know more about super, visit the ATO’s super website.
  • If you are not confident in English and want to speak to a tax officer, phone the Translating and Interpreting Service (TIS National) on 13 14 50 for help with your call.
  • The Australian Government’s Money Smart website is another great resource when it comes to understanding super.
  • Lastly, you can always call your super fund. Some super funds even offer free financial advice sessions.

This article is general in nature and should not be taken as financial advice. It doesn’t take into account the individual circumstances of each reader or their financial situation. You should assess your financial situation before making a decision based on this information.