We receive a lot of questions about Super basics from new employees, contractors and temps. In this blog, we answer some of these questions relating to super, the legalities and what you need to self-manage as a working professional.

What is superannuation or super?

Superannuation, more commonly known as Super, is your money. Under law, employers are required to pay a percentage of your salary in a super fund for you – for your future. It is set aside during your working life for 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 their employees under government rules.

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

Who is entitled to super?

Well, almost all employees in Australia are entitled to super, provided they meet the following conditions under the superannuation guarantee. Employers have to pay super contributions of 9.5% of an employee’s ordinary time earnings if an employee earns $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, along with temporary residents such as temporary visa holders and international students.

Smart Tip – If you are confused about whether you are entitled to super contributions from your employer, use the ATO’s ‘Am I entitled to super?’ tool.

How does superannuation work?

Once you ascertain whether you are entitled to super or not, 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 payment into this super fund, which will then invest your money in various things such as shares, property and managed funds. Super funds also provide insurances of various kinds.

Most employers will pay super funds with every pay slip. However, they are allowed to pay super once every 3 months legally. It might be a good idea to ask your employer the schedule they pay super in, so that you can check your account accordingly.

Smart Tip – You can keep track of your Super by reviewing your MyGov account and can see more information review the Keeping Track of your Super information.

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 Standard Choice Form for you to fill out when you join. Most companies will have an online payroll system and you can also log your details there too.

There are many super funds to choose from with 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 this tool by Canstar or Finder.

Smart Tip – You don’t need a new super fund every time you start a new job. This is also similar 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 had more than one job, or several casual and part-time jobs. Sometimes, employer’s default super plan results in many employees ending up with multiple super funds while changing jobs. This can make it difficult to keep track of where your super is, along with duplicate fee deductions.

Smart Tip – You can view and consolidate your existing super funds through your myGov account. The best way to ensure this is to provide your tax file number (TFN) to your employer and/ or super fund.

Where can I go for help with my superannuation?

• If you want to know more about super, visit ATO’s super website.
• The Money Smart website is another great resource when trying to understand the basics of super.
• Lastly, you can always call up your super fund or set free financial advice sessions with all super fund providers through their web page.

Final tips