For many Australians, trying to set yourself up for retirement is a daunting task. Superannuation (often called “super”) is a long-term savings system designed to help Australians fund their retirement. But what is superannuation and how exactly does it work in Australia? In this guide, we’ll explain what superannuation is, how it works, how much is contributed, and when you can access it.
This information is general in nature and does not take into account your personal financial situation. You may wish to seek independent financial advice before making decisions about your superannuation.
Overview:
- What is superannuation in Australia and how does it work?
- How does superannuation work?
- Can you borrow money from your super?
- How to calculate superannuation
- How to check your super balance
- How to find lost superannuation
- Superannuation FAQs
What is superannuation in Australia and how does it work?
Superannuation is money set aside during your working life to support you in retirement. In Australia, most employees receive compulsory super contributions from their employer under the Superannuation Guarantee (SG).
These contributions are paid into a superannuation fund and invested over time. Combined with investment earnings, your super balance can grow significantly throughout your working life. Because superannuation is designed for retirement, early access to super is generally restricted. Australians needing access to fast funds for unexpected expenses may explore other options, such as a small loan.
What is a superannuation fund?
A superannuation fund is a financial account designed to hold and invest your retirement savings. Your employer’s super contributions are paid into this fund, where the money is typically invested in assets such as shares, property, bonds, and cash.
Different super funds offer different investment options, fees, insurance features, and levels of control. Choosing the right super fund can play an important role in growing your retirement savings over time.
Types of super funds
Once you start work, you are usually able to choose whichever super fund you prefer, or alternatively, your employer can choose for you.
If you are looking to choose your own, there are several types of super funds, each designed to meet different needs and preferences:
- Industry funds: typically run for the benefit of members, often associated with specific industries but usually open to the public.
- Retail funds: usually operated by banks or investment companies, often offering a wide range of investment options.
- Self-managed super funds (SMSFs): private funds managed by the members themselves, who are also trustees. SMSFs offer more control but come with greater responsibilities and costs.
- Corporate funds: established by employers for their employees, often tailored to the specific needs of the business.
- Public sector funds: designed for government employees.
How does superannuation work?
The superannuation process involves several key steps, from contributions during your working life to accessing your superannuation funds upon retirement.
1. Contributions
In line with the Superannuation Guarantee (SG), employers in Australia must make compulsory payments, known as ‘contributions’, into your superannuation account. The minimum amount employers are required to contribute to your super is 12% of your salary, on top of your usual earnings. SG was increased to 12% on 1 July 2025 and is the final scheduled increase.
Individuals can also make voluntary contributions to their superannuation. These can be concessional (pre-tax) or non-concessional (post-tax) contributions.
2. Accumulation phase
During your working life, your superannuation funds are invested by your super fund. The investment returns are added to your account, helping your balance grow over time. You can choose from different investment options based on your risk tolerance and retirement goals. These options range from conservative (lower risk, lower return) to aggressive (higher risk, higher return).
3. Superannuation management:
You can choose a superannuation fund that suits your needs. If you have multiple super accounts, you can consolidate them into one to save on fees and simplify management. You can switch superannuation funds if you find a better option. However, it’s important to compare fees, investment performance, and features if you’re considering a switch.
4. Accessing superannuation
You can generally access your superannuation once you reach your preservation age and are retired from full-time work. The preservation age is the minimum age at which you can generally access your superannuation savings, provided you have met a condition of release. It generally ranges from 55 to 60, depending on your birth year. If you are still working, then you can access your super at the age of 65 (without needing to be retired).
Once you retire, you can convert your superannuation into a pension, which provides you with regular income payments during retirement. The income from super pensions is typically tax-free for those over 60. You can also choose to withdraw some or all of your superannuation as a lump sum. However, this may have tax implications if you are under the age of 60.Taxation
5. Taxation
Contributions and investment earnings within your super fund are generally taxed at a concessional rate of 15%.
However, if you are over 60 then withdrawals from superannuation are usually tax-free. If you are under 60, withdrawals may be subject to tax depending on your age and the components of your superannuation.
6. Death and beneficiaries
In the event of your death, your superannuation balance is paid out to your beneficiaries or your estate. You can nominate beneficiaries to receive your superannuation, which can be binding (the trustee must follow your instructions) or non-binding (the trustee has discretion).
If your super is paid to someone who’s financially dependent on you (like your spouse or a child under 18) it’s usually tax-free. But if it goes to someone who isn’t financially dependent (like an adult child), they may have to pay tax on part of it, up to 15% or 30%. However, this will depend on how your super was taxed while you were alive. To make things simpler later on, it’s a good idea to check your beneficiary nominations regularly and keep them up to date.
Understanding how superannuation works is crucial for ensuring a comfortable retirement. It’s important to stay informed about your superannuation options, fees, and investment performance. Consulting with a financial advisor can also help you make the most of your superannuation.
Can you borrow money from your super?
Generally speaking, you can’t directly borrow money from your superannuation. Unlike a traditional loan, there is no system that allows you to temporarily borrow money from your super and pay it back later.
Instead, superannuation funds can usually only be accessed through withdrawals, and strict eligibility rules apply. In most cases, you can only access your super once you reach your preservation age and retire, although limited early access options may be available in certain circumstances, such as severe financial hardship or compassionate grounds.
Depending on your age and circumstances, some super withdrawals may also be taxed. Because super is designed to support Australians during retirement, rules around accessing these funds early are heavily regulated to help protect long-term retirement savings.
How to calculate superannuation
The best way to calculate your superannuation is to use a free online calculator, like the one available from MoneySmart. However, generally, to work out how much superannuation you should be paid, you will need to:
- Work out what your gross salary is per quarter
- Then multiply your salary for that quarter by the minimum SG (superannuation guarantee) percentage. For example, if your salary per quarter is $15,000 and the minimum SG is 12%, then your super for that quarter should be $1,800 ($15,000 x 12% = $1,800)
How to check your super balance
There are a few ways to see how much super you currently have, including online, through your super fund, or by reviewing your super statements.
Log in to your myGov account
If your myGov account is linked to the ATO, you can view your super accounts online.
The ATO’s online services will show your super funds, account balances, and recent contributions reported by your employer.
Use your super fund’s website or app
Most super funds provide online member portals or mobile apps where you can check your balance at any time.
You may also be able to view recent transactions, investment performance, insurance details, and contribution history.
Check your super statements
Super funds generally send members regular statements, either by mail or email.
These statements usually include your account balance, contributions received, fees charged, and investment earnings for the period covered.
Contact your super fund directly
You can also call your super fund if you need help accessing your balance or understanding your account information.
They may ask you to verify your identity before discussing your super details over the phone.
How to find lost superannuation
If you’re unsure whether you have superannuation accounts in your name, there are a few different ways to check.
Check online through myGov
One of the quickest ways to search for super is through your myGov account linked to the ATO.
After signing in, you can view any super accounts recorded under your details, including account balances and fund information.
Contact the ATO by phone
The ATO can also help you search for lost super over the phone.
- Lost super search line (if you know your TFN): 13 28 65
- General ATO enquiries: 13 10 20
- ATO Indigenous helpline for Aboriginal and Torres Strait Islander peoples: 13 10 30
Having your tax file number (TFN) ready may help speed up the process.
Submit a request by post
If you’d prefer to apply by mail, you can download a lost and unclaimed super search form from the ATO website.
Once completed, send the form to the postal address listed on the document.
Visit a Services Australia location
Services Australia locations around Australia may also be able to assist you in accessing ATO services.
Depending on the location, staff may help you use a computer, printer, or phone to check your super information. Some centres provide in-person assistance, while others operate as self-service access points.
Need access to extra funds? Swoosh is here to help!
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Superannuation FAQs
When did superannuation start in Australia?
The Superannuation Guarantee (SG) legislation was introduced by the Keating Government in 1992. This legislation made it compulsory for employers to make superannuation contributions on behalf of their employees. The initial contribution rate was set at 3% of an employee’s ordinary time earnings, with planned incremental increases.
What is the current superannuation rate?
The current Superannuation Guarantee (SG) rate in Australia is 12% of an employee’s ordinary time earnings. Employers are generally required to pay this percentage into an eligible employee’s super fund to help employees save for retirement.
What are reportable superannuation contributions?
Reportable superannuation contributions are certain additional contributions made to your superannuation fund that must be reported to the ATO. There are generally two main types:
- Reportable employer super contributions (such as salary sacrifice contributions)
- Reportable personal concessional contributions (personal contributions claimed as a tax deduction)
These are different from standard compulsory employer super payments under the SG. Reportable super contributions may affect your eligibility for some government benefits, tax offsets, and other financial assessments.
What is a Unique Superannuation Identifier?
A Unique Superannuation Identifier (USI) is a number used to identify a specific superannuation fund product. Employers and the ATO use USIs to ensure super contributions are paid into the correct account. You can usually find your fund’s USI on your super fund’s website, your statement, or by contacting your fund directly.
What is the average superannuation balance at retirement in Australia?
The average superannuation balance at retirement in Australia varies depending on factors such as income, age, employment history, and voluntary contributions. According to data from the Association of Superannuation Funds of Australia (ASFA), many Australians retire with balances below the amount considered necessary for a comfortable retirement, highlighting the importance of contributing regularly throughout your working life.
How do I find my superannuation number?
Your superannuation number, often referred to as your ‘member number’, is a unique identifier associated with your superannuation account. There are a number of ways you may be able to find your member number, including:
- Checking your superannuation statements
- Contacting your superannuation fund directly and seeking assistance
- Through your MyGov account
- In your employer’s records
- Checking your online superannuation account
Is superannuation paid on overtime?
No, superannuation is generally not paid on overtime in Australia. The Superannuation Guarantee (SG) is calculated based on an employee’s ordinary time earnings (OTE), which typically includes regular wages, salaries, and allowances but excludes overtime payments. If you’re unsure about your specific situation or if your employment contract has unique terms, it’s a good idea to check with your employer or consult a financial advisor.
Is superannuation taxed?
Although it is generally taxed at a lower rate than regular income, superannuation is taxed. Taxation occurs:
- When contributions are made
- While the super fund earns investment income
- When money is withdrawn from the fund
