A lot of people plan for their retirement as early as possible because in this way, time is on their side, meaning they have more years to save up and have a comfortable life upon retirement. In Australia, employers pay superannuation contributions on behalf of their employees to a super fund.
Your employer should make superannuation contributions that are the equivalent of 9.5 percent of your ordinary time earnings
Here are other facts about your entitlement to superannuation in Australia:
- Your employer should make superannuation contributions that are the equivalent of 9.5 percent of your ordinary time earnings. This is the superannuation guarantee based on annual entitlement.
- You will be eligible for superannuation guarantee if you have a monthly income of at least $450.
- If you are under 18 years of age, you still need to have a monthly income of at least $450 and work at least 30 hours.
- Starting 2013/2014 financial year, individuals who are 70 years of age and older are eligible for superannuation guarantee.
- You should pay the superannuation guarantee at least every three months. Your employer must pay the super entitlement to your super fund at least every quarter. If this is not the case, you can file a complaint at the Australian Taxation Office.
- There’s a maximum contributions base for those who have a high income. Those who are earning a huge amount of money will have a cap or limit to their superannuation guarantee. For the 2017/2018 financial year, the super contributions are the equivalent of 9.5 percent of your ordinary time earnings, but only up to a yearly cap of $211,040.
- Understand your remuneration package. You should ask your employer if your salary includes your super, or if it is calculated after super.
- Know the salary sacrifice arrangements. When you’re starting with a new job, make sure to understand the salary sacrifice rules and negotiate carefully. You may end up with the employer cutting your superannuation guarantee because of your salary sacrifice arrangement.
- Self-employed individuals can still get superannuation guarantee. You can receive contributions and still have your super contributions tax-deductible, when you’re self-employed for the 2017/2017 financial year.
- Contributions count towards the concessional cap. The superannuation contributions made by your employer count towards your concessional cap before tax.
Here are several things that you need to know about superannuation. You can calculate how much money you need upon retirement and how much should be added to your super fund on a regular basis by using a retirement calculator.
Do you have other ideas on superannuation in Australia? Share your insights in the comments section.