Superannuation

Superannuation, often called super, has been compulsory for most employees in Australia since 1992. Employers must pay a minimum percentage of each employee’s ordinary earnings, called the Superannuation Guarantee, into a fund chosen by the employee or a default fund. The rate has increased over time and reached 12% in 2025.

Employees can also make extra voluntary contributions, some of which receive tax concessions. Money in super is invested in options such as growth, balanced or conservative portfolios, and investment earnings are taxed at concessional rates.

For example, an employee earning 80,000 a year would have about 9,600 a year paid into their super fund by their employer at the 12% rate.

Super generally cannot be accessed until the person reaches their preservation age, between 55 and 60 depending on when they were born, and retires, or reaches 65. Withdrawals after 60 are usually tax-free. The system has made Australia one of the countries with the largest pools of retirement savings relative to the size of its economy. Similar compulsory systems exist elsewhere, such as provident funds in several Asian countries.