Super (short for superannuation) is a tax-effective way to save for later in life. We know it’s not very exciting, but it’s compulsory under Australian law so it’s handy to know the ins and outs of it. It’s designed to help you fund or supplement your lifestyle once you stop working. 

What is Super?

While you’re working, super is paid by your employer (or by you if you’re self-employed). The money is paid into your super account where it can be invested, so by the time you stop working, your super balance could have grown into a sizeable sum.

Key facts

  • Your employer is required to pay 9.5% of your salary into super. This is called the Superannuation Guarantee (SG).
  • The SG rate is currently 9.5%, and will gradually increase to 12% by 1 July 2025.
  • Generally, if you earn more than $450 per month, you are entitled to be paid super by your employer.
  • You can usually take your super account with you when you move jobs, keeping your money together in one place.
  • You only pay 15% tax on the super contributions made by your employer from your pre-tax salary, rather than the marginal tax rate, which is likely to be higher.
  • You can apply for Income Protection, Total Permanent Disablement (TPD) and Death insurance through Kinetic Super. Premiums are deducted directly from your super account, rather than paying from your after-tax income.

Saving for your future

While your employer will generally make contributions to your super on your behalf, for many people this amount alone may not be enough to provide for a comfortable lifestyle when you stop working.

It’s important to make sure you have enough money accumulated by the time you stop working, and a great way to do this is by adding extra money to your super.

You can:
- Make one-off lump sum (after-tax) contributions.
- Regularly add contributions (after tax, paid by you or through your employer).
- Salary sacrifice to make pre-tax contributions.

Salary sacrifice

 

In a nutshell

Your account balance grows over time with your super contributions and investment earnings. Taxes, fees and insurance premiums and any negative investment returns would be deducted from your account and reduce your balance.