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What is superannuation and why is it so important?

2023-07-18 04:30

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 2023, 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 11 per cent of your salary. 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 $7,150 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 $58,558.55 and your employer is contributing $6,441.45 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, regardless of how much they are paid
  • under 18 years old, 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.

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What is superannuation and why is it so important?
2023-07-18
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Explore how superannuation can work for you

If you're looking for a super solution that's easy to take care of consider ANZ Smart Choice Super. 

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Important information

“ANZ Smart Choice Super” is a suite of products consisting of ANZ Smart Choice Super and Pension (PDF), ANZ Smart Choice Super for employers and their employees (PDF) and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees (PDF). OnePath Custodians Pty Limited (ABN 12 008 508 496, AFSL 238346 RSE L0000673) (OPC) is the issuer of the ANZ Smart Choice Super suite of products. OPC is the trustee of the Retirement Portfolio Service (ABN 61 808 189 263, RSE R1000986) (RPS) and the ANZ Smart Choice Super suite of products are part of the RPS. You should consider obtaining financial advice before making any decisions based on the information. You should obtain a Product Disclosure Statement (PDS) relating to the relevant financial product and consider it before making any decision about whether to acquire or continue to hold the product. Target Market Determinations (TMDs) where required for relevant products have to be available for consideration by distributors/members. A copy of the PDS and TMD (where relevant) is available via the links above, and upon request by phoning 13 12 87 or by searching for the applicable product at www.anz.com.au/smartchoicesuper. The ANZ Smart Choice Super and Pension product is distributed by ANZ. We recommend that you read the ANZ Financial Services Guide (PDF), before deciding whether to acquire or continue to hold this product. View the ANZ Smart Choice Super and Pension Target Market Determination (PDF). 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 www.anz.com.au/smartchoicesuper. OPC is part of the Insignia Financial group of companies, comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (Insignia Financial Group). The ANZ brand is a trademark of ANZ and is used by OPC under licence from ANZ. ANZ and the Insignia Financial group of companies (including OPC) are not related bodies corporate. ANZ does not stand behind or 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. Past performance is not indicative of future 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.

ANZ does not represent or guarantee that access to ANZ Internet Banking or the ANZ App will be uninterrupted. Temporary service disruptions may occur. ANZ recommends that you read the ANZ App Terms and Conditions available here for iOS (PDF) and here for Android (PDF) and consider if this service is appropriate to you prior to making a decision to acquire or use the ANZ App.

Apple, the Apple logo and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Pay and Touch ID are trademarks of Apple Inc.

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Fee Analysis: Research conducted by SuperRatings Pty Ltd, holder of Australian Financial Services Licence No. 311880 at the request of OPC. For a copy of the latest SuperRatings research, click here (PDF) or call 13 12 87.

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