Need to know
- Super is designed to provide you with income in retirement
- As of 2023, more than 17 million Australians had super accounts
- Super is often the second biggest asset you will own, after a home, but many people find it complex and confusing
Superannuation, or super, is money set aside for your retirement. Your employer pays this money (separate to your salary) into your super fund or, if you're self-employed, you can pay yourself super.
During your working life, your super fund manages this money and it builds up over time. Then, in retirement, you can withdraw and spend this money.
While super is sometimes called a 'nest egg', it's designed to be spent and provide an income for your retirement.
On this page:
- Am I entitled to super and how much should I be paid?
- What are super funds, super accounts and super products?
- What do I do if my employer doesn't pay me super?
- How do I find my lost super?
- Can I change funds?
- How much super will I need to retire and when can I access it?
- What are self-managed super funds and can I use my super to buy a home?
Am I entitled to super and how much should I be paid?
Generally speaking, all employees are entitled to super, whether you're employed in a permanent full-time role, working casually or part-time, and whether you're an Australian citizen or a permanent or temporary resident.
Employers must pay all their employees super, except in a couple of circumstances:
- If you're under 18, your employer must pay super if you work more than 30 hours per week. Once you turn 18, your employer must pay super for any amount of work.
- Similarly, domestic workers (such as carers and housekeepers) are only entitled to super if they work at least 30 hours a week.
Whether independent contractors are entitled to super is complicated. If these contractors are mainly paid for their labour, the employer must pay them super. See the ATO for more information on super for independent contractors.
If you're unclear about whether you're entitled to super, the ATO also has a tool to help you find out.
How much should I be paid?
As of 1 July 2024, employers must pay 11.5% of your 'ordinary time earnings'. So, if you earn $100,000 in ordinary time earnings annually, your employer must pay your fund 11.5% of this amount ($11,500) over the year.
The super rate is scheduled to go up to 12% on 1 July 2025.
But what are ordinary time earnings? These earnings are what you earn in your ordinary work hours (before tax). It includes commissions, bonuses, shift loading and annual leave loading, but it doesn't include overtime – employers don't have to pay super on overtime.
From 1 July 2025, the government will pay super on government-funded paid parental leave.
From 1 July 2025, the government will pay super on government-funded paid parental leave
See the ATO website for more information on what is and isn't counted as 'ordinary time earnings'
When does my employer have to pay me super?
Currently, employers only have to pay super quarterly, but from 1 July 2026, employers will have to pay super at the same time as your salary or wages.
What are super funds, super accounts and super products?
Super funds look after peoples' super and hold it in trust until they can access it. Each individual has a super account, which is kind of like a bank account. It's possible (though generally not recommended) to have different accounts at different funds.
Just as banks can offer different types of accounts, super funds can offer a range of super products.
What are MySuper and 'Choice' super products?
MySuper
MySuper products are designed to be 'no frills' products with relatively low fees. They were intended to suit most Australians who want their fund to design and implement a super investment strategy rather than doing it themselves.
A key feature of MySuper products is that you can be 'defaulted' into a MySuper product. If you don't nominate a super fund, your employer must first check to see if you already have a super fund from a previous employer. If not, they will pay your super into a MySuper product they use as their default.
Choice super
You can't be defaulted in to a a choice super product; you have to actively elect to join one.
Currently, the government puts all MySuper products through an annual performance test to make sure they're doing a reasonable job building up your retirement income, but only some choice products are performance tested.
Whatever super product you choose, the most important things to consider are:
- low fees
- long-term performance
- the fund's insurance and whether it suits your needs.
See out article on choice super products before joining one.
How do I find a super fund that meets my needs?
The keys to look for are:
- strong long-term performance. Don't worry about which fund performed the best over the last month or year. Instead, look at performance over a five- or ten-year period
- competitive fees (one percent in fees is a useful guideline)
- insurance in you super that meets your needs.
Unpaid super is a big problem in Australia. If your employer is not paying your super you can report them to the ATO.
What is the insurance in my super?
Most super funds will automatically offer you insurance when you sign up. They deduct the fees for this insurance from your super balance. These are the three types of insurance you may have:
1. TPD insurance
Super funds will automatically sign you up for total and permanent disability cover if you are 25 or over and have at least $6000 in your account (or if you're under 25 and work in a job designated as dangerous). This insurance gives you income if you become injured or ill and are unlikely to work again.
2. Income protection
Some funds automatically offer income protection insurance. This cover provides regular income if you're temporarily out of work due to illness or injury. It lasts for a set amount of time, often two years.
3. Life insurance (or death cover)
Death cover provides your beneficiaries (such as your spouse or children) with income if you die prematurely. It can pay out either as a lump sum or regular income.
Read our guide to insurance in super to find out more.
What do I do if my employer doesn't pay me super?
Unfortunately, unpaid super is a major problem in Australia. If your employer hasn't paid your super, hasn't paid you the full amount they owe, is paying you late or paying to the wrong fund, you can report them to the ATO using this form.
How can I see what super I have?
MyGov records all your super accounts across different funds. To find this, log into MyGov, then click on 'Australian Taxation Office' and then 'Super'.
How do I find my lost super?
Many Australians have 'lost super'. You may lose track of your super when you change jobs, start a new account and forget about your old one. Read our explainer on how to find and claim your lost super.
Can I change funds?
Most Australians are free to change super funds.
ASIC suggests checking whether changing funds will impact how much super your employer pays – some employers pay more to certain funds.
You may also want to check if you can get the same disability insurance in your new fund. Checking your insurance at the new fund is particularly important if you have a pre-existing medical condition you would like the insurance to cover.
Should I consolidate my super accounts?
It's a good idea to consolidate your super into a single account. Having one account will:
- help you save on fees and retire with more (The Productivity Commission calculated that an increase of just 0.5 percentage points could cost a full-time worker an extra $100,000 in fees by the time they retire.)
- avoid paying for duplicate insurance policies. (The Productivity Commission found that duplicate policies across multiple accounts could drain more than $50,000 from a person's retirement income. Further, you may not be able to claim on multiple policies, meaning you could be paying for useless insurance.)
- make it easier to keep track of your super.
How do I change funds?
You can change funds by contacting the super fund you'd like to join. Some funds are set up so you can join in under 10 minutes. Once you've set up the new account, you can move your money to the new fund two ways:
- log into MyGov, click on 'Australian Taxation Office', then 'Super', then 'Manage', then 'Transfer super'
- download and complete the ATO form 'Request for rollover of whole balance of super benefits between funds'. You'll then need to send this to your old fund.
You'll also need to inform your employer to pay your super to the new fund. You can do this two ways:
- download and complete the ATO's superannuation standard choice form and give this to your employer so they pay your super into your chosen fund
- log into MyGov, click on 'Australian Taxation Office', then 'Employment', then 'New employment', and then 'Super details'.
It's a good idea to consolidate your super into one account so you are not paying extra fees or insurance costs.
How much super will I need to retire and when can I access it?
How much you're likely to retire with will depend heavily on your income, any other savings you have and other factors such as whether you own a home.
To give you a 'rule of thumb' on how much super you'll need to retire, Super Consumers Australia has developed some retirement savings targets. Moneysmart also has tools to help you work out how much super you'll need in retirement.
When can I withdraw my super?
You can withdraw money from your super when you're 65, even if you're still working. If you're 60 or over, you can access your super if you stop working (even if you return to work). If you're aged between 55 and 60, you can access some of your super while you continue to work with a transition to retirement (TTR) account.
Transition to retirement (TTR) accounts allow people working fewer hours to supplement their income
TTR accounts allow people working fewer hours to supplement their income. If you're still in full-time work, it can help you save on tax and build up your super as you approach retirement. However, ASIC says these options can be "complicated" and work best if you're over 60 and have a mid-to-high income.
You can also apply to withdraw your super early (i.e. before you would normally be allowed to access it) in very limited circumstances, including to:
- pay for medical expenses for yourself or someone else
- pay for funeral expenses
- prevent foreclosure on your home.
See the ATO's guide to accessing your super early on compassionate grounds.
What are self-managed super funds and can I use my super to buy a home?
A self-managed super fund (SMSF) is a way to create your own super fund and have complete control over how your money is invested. An SMSF can have between one and six members.
But starting an SMSF is not for everyone. As the ATO says: "It's a major financial decision and you need to have the time and skills to do it."
You'll need to understand the rules and obligations of running an SMSF in detail. There can also be complications if the relationships between the people in an SMSF change.
Can I use my super to buy a home?
You can't directly withdraw your super to buy a house (at least not until you've reached preservation age).
There are strict rules around using a self-managed super fund to buy an investment property
There is, however, a program that allows you to use your super account to help save for a home. This is called the First Home Super Saver Scheme (FHSSS). In this program, you can make voluntary contributions to your super (i.e. not the usual super your employer pays) and then withdraw it to buy a home.
This scheme can save you on tax, but you need to plan carefully and be across the details.
It's also possible to buy an investment property through an SMSF but there are strict rules around this. Most importantly, you can only buy the property to provide retirement income – you can't purchase it for you or your relatives to live in. See the ATO's guide to investing in property through an SMSF.
We're on your side
In more than 60 years of making a difference for Australian consumers, we've never taken ads or sponsorship.
Instead we're funded by members who value expert reviews and independent product testing.
With no self-interest behind our advice, you don't just buy smarter, you get the answers that you need.
You know without hesitation what's safe for you and your family.
And you'll never be alone when something goes wrong or a business treats you unfairly.
Learn more about CHOICE membership today
Stock images: Getty, unless otherwise stated.
