Superannuation is a form of long-term savings designed to help you save for retirement. The aim of superannuation is to ensure that working Australians will have a source of income once they retire. For most people, any income from superannuation will supplement the Age Pension. However, contributing extra to your superannuation can help set you up for a more comfortable lifestyle in retirement.
The Superannuation Guarantee (SG) legislation ensures most Australian workers receive compulsory superannuation support from their employers.
The main exceptions are those who are:
A common misconception is that contractors are not covered by the SG. If you have been engaged under a contract that is mainly for your labour, you are covered by the SG for at least the labour portion of your contract.
If you are unsure, please contact the Australian Taxation Office (ATO) on 13 10 20.
The Superannuation Guarantee (SG) sets out the minimum level of support that an employer is required to contribute. The current minimum is 9% of your gross earnings base. Some awards and registered agreements stipulate a higher amount. Your employer is obligated to make a contribution into a complying superannuation fund at least once every quarter.
Your super is paid to (contributed to) a super fund, which invests the money into assets such as shares, property, cash or fixed interest. Most funds, including LUCRF Super, allow you to choose where your super is invested, by offering a range of investment options. Employers will contribute your super into their default fund, unless you are eligible for choice of fund and you make a choice.
From 1 July 2005 the majority of employees have been given the right to choose the superannuation fund that will receive their SG contributions. The eligible employees who are able to choose their fund was extended from 1st July 2006 to cover employees working for corporations who previously could not choose a fund because they were employed under a State Award. These employees are now covered under a Federal Workplace Agreement called a 'notional agreement preserving state awards'. If you don't want to choose a fund, your super will automatically be contributed to your employer's 'default fund'. More information about this can be found on our Choice of Fund page.
Your employer has up to the 28th day after the end of each quarter to make superannuation guarantee and salary sacrifice (before-tax) contributions on your behalf. For example, payments for the September quarter are due on the 28th of October. If they do not do this, they are required to pay the superannuation guarantee charge to the Australian Tax Office (ATO). Once the ATO has received that payment they will then make the contribution into your account.
The only difference to this ruling is that personal member (after-tax) contributions must be paid within 28 days of the end of the month in which they were deducted from your wages. If you don't think your employer has made your SG contributions, you should contact your fund or the ATO.
As people change jobs, they sometimes lose track of their superannuation benefits. When a super fund cannot contact a member they report this to the Australian Tax Office (ATO). The ATO keeps a register of these lost members. The 'Lost Members Register' (LMR) holds details from all regulated superannuation funds in Australia, except self-managed funds. You can search to see if you have any lost super benefits by using the SuperSeeker on the ATO website at www.ato.gov.au/super or contacting the ATO on
13 28 65 and following the prompts. You will need to have your Tax File Number ready in order to conduct your search.
Super funds are required to deduct a 15% contribution tax from your employer's SG contributions. This also applies to amounts contributed through salary sacrifice (before-tax) contributions. If you have made an after-tax personal member contribution it has already been subject to income tax and does not attract further taxation. Contribution tax does not apply to normal transfers or rollovers between complying funds as long as they have come from a taxed source.
Please note that higher tax is applied if you have not notified your super fund of your tax file number.
Complying super funds are subject to a tax of up to 15% on investment earnings and 10% on capital gains. Super funds that invest in Australian shares are able to offset any dividend franking credits received against their overall tax liability. Because super fund earnings have already been subject to tax, you do not need to declare the earnings of the fund on your tax return.
Since 1 July 1999, all contributions made into a regulated super fund and all fund earnings after 30 June 1999 are preserved until retirement, regardless of their source. These preservation rules require benefits to remain within the Australian superannuation system until you reach retirement age. Government regulations also set out a minimum age for the release of benefits, known as the preservation age. Your preservation age depends on your date of birth, see table below:
| Date of birth | Preservation age |
| Before 1/7/60 | 55 |
| 1/7/60 – 30/6/61 | 56 |
| 1/7/61 – 30/6/62 | 57 |
| 1/7/62 – 30/6/63 | 58 |
| 1/7/63 – 30/6/64 | 59 |
| After 30/6/64 | 60 |
There are exceptional circumstances under which you may be able to apply for early release of your super. These are described on our Accessing your Super page.