Superannuation is Australia's compulsory retirement savings system — and one of the most generous in the world if you use it correctly. Yet many Australians pay little attention to their super until they're close to retirement. Understanding it earlier can make a dramatic difference to your financial future.
As of 1 July 2025, your employer is legally required to contribute 12% of your ordinary time earnings into your superannuation fund. This is the Superannuation Guarantee (SG) rate, which has been gradually increasing from 9.5% and has now reached its legislated ceiling of 12%.
SG contributions must be paid at least quarterly — many employers pay more frequently. If your employer isn't paying super, you can report it to the ATO.
Concessional contributions include your employer's SG contributions and any salary sacrifice you make. They're taxed at a flat 15% inside the fund — much lower than most people's marginal tax rate.
The annual concessional contributions cap for 2025–26 is $30,000. This includes your employer's SG contributions.
You can also contribute after-tax money to your super. These contributions are not taxed again on entry (you've already paid income tax). The annual non-concessional cap is $120,000, or up to $360,000 over three years using the bring-forward rule.
Salary sacrifice is one of the most effective legal tax strategies available to Australian workers. Instead of taking part of your salary as cash (and paying marginal tax on it), you direct it pre-tax into super where it's taxed at only 15%.
Example: If you earn $100,000 and salary sacrifice $10,000 into super, you pay income tax on $90,000 instead of $100,000. At the 30% marginal rate, you save $3,000 in tax — and still end up with $8,500 in super (after 15% contributions tax).
First home buyers can use voluntary super contributions as a tax-effective way to save a deposit. You can withdraw up to $50,000 per person (from eligible voluntary contributions made from 1 July 2017) plus associated earnings to use toward your first home.
The tax savings can be significant — contributions go in at 15% tax and come out taxed at your marginal rate less a 30% offset, often resulting in substantial net savings compared to saving in a bank account.
Your super fund invests your money in various asset classes. Most funds offer:
For younger Australians with decades until retirement, a higher growth option typically produces better long-term outcomes despite short-term market swings.
You can generally access your super when you reach your preservation age and retire, or when you turn 65 regardless of employment status.
| Date of Birth | Preservation Age |
|---|---|
| Before 1 July 1960 | 55 |
| 1 July 1960 – 30 June 1961 | 56 |
| 1 July 1961 – 30 June 1962 | 57 |
| 1 July 1962 – 30 June 1963 | 58 |
| 1 July 1963 – 30 June 1964 | 59 |
| From 1 July 1964 | 60 |
Use our super calculator to project your balance at retirement based on your current contributions and investment returns.
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