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What is superannuation and why is it so important?


Published 10 August 2021

Super is one of the most important things you need to consider when you start working in Australia as your employer will need to know where to contribute your super guarantee payments.

Retirement may be the last thing on your mind when you’re just starting your career or trying to get settled in Australia.

But there’s no doubt that you’re looking forward to a comfortable and enjoyable retirement – when after decades of working you’d savour the fruits of your labour.

In Australia, one of the most tax-effective ways people can save for an enjoyable and comfortable retirement is through superannuation or ‘super’ as it’s more commonly known as.

Super is also one of the most important things you need to consider when you start working in Australia as your employer will need to know where to contribute your super guarantee payments.

What is superannuation guarantee?

As of 1 July 2021, the superannuation guarantee (often referred to as ‘SG’) payments – is the minimum amount required to be paid, either on your behalf by your employer, or by you if you’re self-employed, into your chosen super fund at least every 3 months. Currently this minimum SG amount is equal to 10% of your salary. However, under current legislations, employees earning under $450 per month don’t need to be paid SG but in the 2021 Federal Budget it was proposed that this threshold be removed from 1 July 2022. When you get a job offer, it’s important that you check the superannuation component of your employment package as some employers make super contributions on top of the base salary while others offer it as part of the overall package.

Here are two examples to illustrate this:

  1. If your salary specifies that it does not include super, this means that the amount that your employer must contribute is on top of your ordinary time earnings. You might see this referred to as your salary ‘plus super’ or ‘excluding super’. So, if your ordinary time earnings are $65,000 per year, your employer must contribute an extra $6,500 to your super as SG.
  2. If your salary package is inclusive of super, this can be described as your salary ‘including super’. That means that if you’re earning $65,000 including super, your ordinary time earnings are $59,091 and your employer is contributing $5,909 to your superannuation.

How does it work and are you eligible for super?

In Australia, super is mainly paid for or contributed by employers. This means that once you are hired – even for a temporary or casual role – your employer is required by law to contribute to your nominated superannuation fund. 

Currently, whether you’re doing full time, part-time or casual work, your employer must contribute to your super fund for you if you are:

  • 18 years old or over, and are paid $450 or more (before tax) in a calendar month
  • under 18 years old, being paid $450 or more (before tax) in a calendar month and work more than 30 hours in a week.

Keeping track of your super

It’s important to check your payslips to ensure your employer is paying you the correct amount of SG into your chosen super fund at least every 3 months. You can easily keep an eye on your SG payments in Internet Banking or the ANZ App if you have your super with ANZ Smart Choice Super and have registered for internet banking.

The earlier you get started saving for your retirement with a performing, low-cost super fund, the better chance you have of enjoying your ideal retirement.

Explore how Superannuation can work for you

ANZ Smart Choice Super

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“ANZ Smart Choice Super” is a suite of products consisting of ANZ Smart Choice Super and Pension (PDF 189kB)ANZ Smart Choice Super for employers and their employees (PDF 186kB) and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees (PDF 198kB). The ANZ Smart Choice Super and Pension product is distributed by Australia and New Zealand Banking Group Limited (ANZ) (ABN 11 005 357 522). View the ANZ Smart Choice Super and Pension Target Market Determination (PDF 252kB). ANZ Smart Choice Super for employers and their employees and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees are MySuper compliant products issued pursuant to the latest PDS available at anz.com/smartchoicesuper. ANZ Smart Choice Super is part of Retirement Portfolio Service (the Fund) (ABN 61 808 189 263) and is issued by OnePath Custodians Pty Limited (ABN 12 008 508 496, AFSL 238346, RSE L0000673) (OPC), the trustee of the Fund. OPC is a member of the IOOF Group of companies, comprising IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. The Australia and New Zealand Banking Group Limited (ANZ) (ABN 11 005 357 522) brand is a trademark of ANZ and is used by OPC under licence from ANZ. ANZ and the IOOF Group of companies (including OPC) are not related bodies corporate. ANZ does not guarantee these products.

Before re-directing your super or moving your money into ANZ Smart Choice Super, you will need to consider whether there are any adverse consequences for you, including loss of benefits (e.g. insurance cover), investment options and performance, functionality, increase in investment risks and where your future employer contributions will be paid.

This information is of a general nature and has been prepared without taking account of your personal needs, financial situation or objectives. Before acting on this information, you should consider whether the information is appropriate for you having regard to your personal needs, financial circumstances or objectives.

All fees are subject to change. Other key features are relevant when choosing a super fund, including performance.

Taxation law is complex and this information has been prepared as a guide only and does not represent taxation advice. Please see your tax adviser for independent taxation advice. The information on insurance cover is a summary only of the terms and conditions applying to the insurance cover. To the extent there is any inconsistency with the terms of the insurance cover provided by the insurer, the terms of the insurance policy will prevail.

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