Super contributions

If you’re employed, your employer should be paying a percentage of your earnings into your super account.

It’s worth checking to make sure you’re being paid the right amount.

If you can afford it, making extra contributions is a great way to boost your retirement savings. And it can reduce your tax. If you’re on a low income, you may be eligible for extra contributions from the government.

Check you’re getting the right amount of super

In most cases, you’re eligible to receive super from your employer. Even if you have a casual job, your employer must pay you super.

If you’re under 18, you’re eligible to receive super if you work more than 30 hours in a week, regardless of how much you earn.

How much super your employer must pay

Your employer must pay at least 11.5% of your ‘ordinary time earnings’ into your super account.

This minimum payment is called the super guarantee.

Ordinary time earnings are what you earn for your ordinary hours of work.

Use this employer contributions calculator

Work out how much super your employer should be paying into your super account.

Check how much super you’re getting

To see how much super your employer is paying you, check your:

• payslip

• myGov account

• super account — online or by calling your fund

Employers only have to transfer super into your super account once a quarter (every three months). Some choose to pay more often. Ask your employer how often they pay yours.

If your employer is not paying your super

If you’re not getting the right amount, talk to your employer.

If your employer isn’t paying your super, report them to the ATO. See unpaid super from your employer on the ATO website.

Grow your super with extra contributions

You can grow your super by making extra payments yourself. Even small amounts add up over time, and voluntary contributions can reduce the amount of tax you pay.

If you’re on a low income, you may be eligible for extra contributions from the government.

Pre-tax super contributions: salary sacrifice

You can ask your employer to pay part of your pre-tax pay into your super account. This is known as a salary sacrifice or salary packaging.

The payments, called concessional contributions, are taxed at 15%. For most people, this will be lower than their marginal tax rate. You benefit because you pay less tax while you boost your retirement savings.

Generally, making extra concessional contributions is tax effective if you earn more than $45,000 per year.

There’s a limit to how much extra you can contribute. The combined total of your employer and salary sacrificed contributions must not be more than $30,000 per financial year.

You can carry forward any unused concessional contributions. Unused amounts are available for a maximum of five years.

Make after-tax super contributions

You can also make contributions to your super from your after-tax pay.

These payments are called non-concessional contributions because you have already paid tax on the money. You can make up to $120,000 in non-concessional contributions each financial year.

You may be able to get a tax deduction for non-concessional contributions. See the ATO website for more information about claiming deductions for personal super contributions.

Before you can claim a deduction for your after-tax super contributions, you must notify your super fund using the claim form from the ATO.

Use this super contributions optimiser

Grow your super with extra contributions. Work out whether to make extra contributions before or after tax, or a mix of both.

Low income super tax offset

If you earn $37,000 or less, you may be eligible for a low income superannuation tax offset (LISTO) of up to $500 per year.

You don’t need to do anything. The ATO will work out your eligibility and pay the money into your super account.

Government co-contributions

If you’re a low to middle-income earner and make after-tax super contributions, you may be eligible for a matching contribution from the government, called a co-contribution. The government will work out how much you are entitled to when you lodge your tax return. If you’re eligible, the government will pay the co-contribution directly to your fund.

Downsize your home and put money into super

If you’ve owned your home for more than 10 years and you sell it, you may be able to contribute up to $300,000 per person, or $600,000 per couple, from the sale to your super.

You must be age 55 or older and meet the eligibility requirements.

Spouse contributions

You can split your employer super contributions with your spouse. Contact your fund or see contributions splitting on the ATO website for more information.

If your spouse earns a low or no income, you may be able to claim a tax offset if you contribute to their super fund. See tax offset for super contributions on behalf of your spouse on the ATO website.

Case Study

Cara boosts her super by salary sacrificing

Cara earns $90,000 before tax, excluding her employer’s super contribution. If she decides to redirect $15,267 of her pay into salary sacrifice super contributions, she will save $2,977 in tax, with the extra money going into her super fund.

Cara’s income	Without salary sacrifice	With salary sacrifice
Gross salary	$90,000	$90,000
Less salary sacrifice to super	$0	$15,267
Less tax and Medicare levy	$20,017	$14,750
Take home (net) pay	$69,983	$59,983
Cara’s super
Employer super contribution	$9,450	$9,450
Plus salary sacrifice	$0	$15,267
Less contributions tax	– $1,418	– $3,708
Net super contribution	$8,033	$21,010

Assumptions: The figures used in this table are estimates only and are based on 2022—23 income tax rates. They include the low and middle income tax offset and a Medicare levy of 2%. Employer super contributions remain the same after salary sacrifice.

In this scenario, Cara’s take home pay will drop by $10,000. Cara will save $2,977 in tax on income and super, and have an extra $12,977 in her super.

Source: MoneySmart Nov 2024
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/grow-your-super/super-contributions
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