Superannuation is the cornerstone of retirement savings in Australia — and with the Superannuation Guarantee now at 12%, your employer is contributing a substantial amount on your behalf every year. But most Australians don't engage with their super until it's too late to make meaningful changes.
This comprehensive guide explains how super works in 2025–26: the current SG rate, concessional and non-concessional contribution caps, how salary sacrifice works, the tax advantages at every stage, the First Home Super Saver Scheme, and the strategies that actually make a difference to your retirement balance.
The Superannuation Guarantee (SG) is the minimum amount your employer must contribute to your super fund. As of 1 July 2025, the SG rate is 12% of your ordinary time earnings.
This rate has been progressively increasing over recent years and is now at its legislated final level of 12%:
| Financial Year | SG Rate |
|---|---|
| 2022–23 | 10.5% |
| 2023–24 | 11.0% |
| 2024–25 | 11.5% |
| 2025–26 onwards | 12.0% |
Super must be paid at least quarterly — but many employers pay it monthly. The ATO has strict rules around timing, and late or unpaid super can attract significant penalties for employers.
Check your super is actually being paid. Log into your ATO online account (via MyGov) to verify your employer's contributions are landing. Unpaid super is more common than people realise — especially in small businesses, hospitality, and construction.
There are two types of super contributions, each with its own annual cap:
Concessional contributions include:
Concessional contributions are taxed at 15% inside the super fund — which for most people is significantly lower than their marginal income tax rate. This is the core tax advantage of super.
The $30,000 cap includes your employer's SG contributions. If your employer pays $12,000 in SG contributions, you can salary sacrifice or make personal deductible contributions of up to $18,000 more before hitting the cap.
Non-concessional contributions are made from your after-tax income and are not taxed again inside the fund (as you've already paid tax on this money). The annual cap is $120,000.
If you are under 75 and your total super balance is below $1.9 million, you can use the bring-forward rule to contribute up to $360,000 in a single year (three years' worth of non-concessional contributions brought forward).
If you haven't used your full concessional contributions cap in recent years and your total super balance is below $500,000, you can carry forward unused amounts for up to five financial years. This is particularly useful for people who took time out of the workforce, changed careers, or received a large bonus or windfall and want to make a catch-up contribution.
Super has tax advantages at three stages — contributions, earnings inside the fund, and withdrawal.
| Stage | Tax Rate | Notes |
|---|---|---|
| Concessional contributions going in | 15% | vs. up to 47% marginal rate for high earners |
| Non-concessional contributions | 0% | Already taxed before going in |
| Investment earnings (accumulation) | 15% | Capital gains on assets held >12 months taxed at 10% |
| Investment earnings (pension phase) | 0% | Completely tax-free in retirement pension phase |
| Withdrawals after age 60 | 0% | Completely tax-free (from taxed super fund) |
Jenny earns $110,000/year and is in the 37% marginal tax bracket.
She salary sacrifices $10,000 per year into super.
Tax paid on $10,000 salary sacrifice: 15% = $1,500
Tax she would have paid at her marginal rate: 37% = $3,700
Annual tax saving: $2,200 — and the full $10,000 goes to work in her super fund, not just $6,300 after tax.
Over 20 years with 7% investment returns, that extra compound growth can be worth an additional $100,000+ at retirement.
Salary sacrifice is an arrangement where you direct some of your pre-tax salary into your super fund instead of receiving it as income. Your employer pays you less salary and contributes the difference directly to your super fund.
To set up salary sacrifice:
Important: ensure your employer is calculating your SG contributions on your full ordinary time earnings before the salary sacrifice — not the reduced post-sacrifice amount. Some employers incorrectly calculate SG on the reduced salary, effectively reducing your super contributions overall.
If you're self-employed, a contractor, or your employer doesn't offer salary sacrifice, you can make personal contributions to your super fund and claim a tax deduction for them. These count as concessional contributions and are taxed at 15% inside the fund.
To claim the deduction:
The FHSS allows eligible first home buyers to save for a deposit inside their super fund and withdraw those savings — plus earnings — to use for a home purchase.
The FHSS works best for people who have time to build up contributions (2+ years) and are in a higher tax bracket where the salary sacrifice tax saving is most valuable.
Timing matters: You must receive your FHSS release from the ATO before you sign a purchase contract or unconditional exchange. If you sign first and then try to access FHSS, you will not qualify. Plan well in advance.
These are rough industry benchmarks for super balances by age, based on ASFA retirement standards for a "comfortable" retirement:
| Age | Benchmark Balance (Single) | Benchmark Balance (Couple) |
|---|---|---|
| 30 | $45,000 | $40,000 each |
| 35 | $80,000 | $70,000 each |
| 40 | $130,000 | $110,000 each |
| 45 | $200,000 | $170,000 each |
| 50 | $290,000 | $250,000 each |
| 55 | $400,000 | $360,000 each |
| 60 | $550,000 | $500,000 each |
| 67 (retirement) | $595,000 | $690,000 combined |
Based on ASFA Retirement Standard (June 2025). A "comfortable" retirement is estimated at $52,085/year for singles and $73,337/year for couples.
If you've worked multiple jobs, you may have super spread across several funds — each charging fees. Consolidating into one fund eliminates duplicate fees and makes your balance easier to manage. Use MyGov to find all your super accounts and initiate a rollover.
Super funds offer multiple investment options ranging from conservative (cash, bonds) to growth (shares, property). Younger Australians with decades until retirement should generally be in a higher-growth option to maximise long-term returns. Many people remain in the default "balanced" option when a "high growth" option would serve them better over a long timeframe.
Even modest salary sacrifice in your 30s and 40s has a dramatic effect by retirement due to compound growth. A $5,000/year salary sacrifice at age 35 could add $150,000–$200,000 to your retirement balance by age 67.
If your spouse earns under $40,000, you can contribute to their super and receive a tax offset of up to $540 per year. This is a simple, low-effort strategy for couples where one partner works part-time or is on a career break.
If you earn under $58,445 and make an after-tax (non-concessional) contribution to your super, the government will contribute up to $500 as a co-contribution. The maximum $500 co-contribution applies if you earn under $43,445 and contribute $1,000. This is free money — take it if you're eligible.
Most super funds automatically include life insurance, total and permanent disability (TPD), and income protection insurance. These can be valuable — but the premiums come out of your super balance. Review whether the coverage is appropriate and competitive. Many people are significantly over- or under-insured without realising it.
Use our free calculators to model stamp duty, CGT, mortgage repayments, and more.
Open Super Calculator →Super is preserved until you reach your preservation age and meet a condition of release. The preservation age for anyone born after 1 July 1964 is 60 years old.
Conditions of release include:
Withdrawals from a taxed super fund after age 60 are completely tax-free — one of the most powerful retirement tax concessions in the Australian system.
Your super is not automatically part of your estate — it is distributed according to a binding or non-binding death benefit nomination you make with your super fund. Without a valid nomination, the trustee decides who receives your super. Keeping your nomination up to date is essential, especially after major life events like marriage, divorce, or having children.
Yes, in limited circumstances. Severe financial hardship access requires you to have received Commonwealth income support payments for 26 continuous weeks and be unable to meet reasonable and immediate living expenses. You can access between $1,000 and $10,000 per 12-month period. Compassionate grounds access covers specific medical, funeral, mortgage arrears, and palliative care expenses — and requires ATO approval.
Super held in accumulation phase is generally not assessed under the Centrelink means test if you are under preservation age. Once you reach preservation age or convert to a pension, the super balance or pension assets are assessable. This has significant implications for retirement planning and age pension eligibility.
An SMSF is a super fund you set up and manage yourself — giving you investment flexibility including direct property, shares, and unlisted assets. However, SMSFs come with significant regulatory, compliance, and administrative obligations. They are generally only cost-effective for balances above $250,000–$500,000. Always seek specialist SMSF advice before establishing one.
Log into MyGov and link your ATO account. Under "Super," you can see all super accounts held in your name, including any ATO-held super (lost super the ATO holds on your behalf). Consolidating lost super is straightforward from the same screen.
Mike Backman — Founder of Aussie Property & Crypto Calc. Mike researches Australian property, taxation and personal finance and maintains all calculators using ATO, ASIC, RBA and state government data.
Last updated: 19 July 2026 · About this site · Report an error