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- Know your superannuation obligations and benefits

  Australian Superannuation

Below currency is in AUD.

Employers are required to pay 9% superannuation on eligible employee earnings into complying superannuation fund or retirement savings account by the 28th of the month following each quarter-end. To be entitled for an employer superannuation contribution, an employee must age between 18-70 and earn $450 or more in a calendar month. If you are under 18, you must work at least 30 hours a week to be entitled to the compulsory employer superannuation contribution. For high income earners, any earnings in excess of $35,240 a quarter in 2006-07 (the quarterly ceiling is adjusted with an index every year) will be disregarded.

An employer may contribute more than the compulsory superannuation but the total amount, concessional contribution, is capped at $50,000 (indexed annually) a year.

Concessional superannuation contribution is a pre-tax remuneration item of the employee and a tax deductible expense to the employer. Concessional contribution attracts 15% income tax in the superannuation fund and any amount over the cap will be subject to extra tax.

Personal contribution is an after-tax item paid out of an individual's pocket and non-concessional.

If you age between 65-74, you must work at least 40 hours during a 30 days' period in a financial year before you can make any non-concessional contribution. Work test is not required for those under 65.

You can make up to $150,000 non-concessional contribution a year, which is three times the concessional cap. If you are 65 or over in any financial year, you can bring forward a lump sum contribution up to $450,000 over a three year period.

Conditions apply to the above contribution rules. Too much superannuation will mean tax at a high marginal rate.

If you have several superannuation funds, you are advised to consolidate them to avoid unnecessary administration cost. If you are not sure which superannuation funds your former employers have contributed for you, go to ATO or SuperSearch to locate your lost superannuation account.

Eligible temporary residents who work in Australia, and have superannuation contributions paid by their employer, are entitled to receive their superannuation benefits when they leave Australia for good. This payment is called the Departing Australia Superannuation Payment (DASP). Please check ATO for more details.

If you are a low or middle income earner, you may be eligible for the Government Superannuation Co-contribution. For 2006/07, 2007/08 and 2008/09, the Government matched a dollar fifty cents up to a maximum of $1,500 p.a. to every dollar of your personal contribution. From 2009/10, the government co-contribution is reduced to a maximum of $1,000. If you are a permanent resident aged less than 71, your total income is less than $58,000 and more than 10% of your income comes from employment, you may be eligible for the co-contribution. Any income in excess of $28,000 will have the maximum co-contribution reduced by 5 percent on the excess. For further details, please visit ATO.

Disclaimer :

While the writer has exercised due care in writing the article, neither she nor this website is responsible for any error made or any of your decisions. Legislative changes may occur after the writer has published the article. This page is for the use of professional accountants and business consultants. Each individual or business has its unique feature and the above is for general information only. Readers should seek advices, applicable to their situations, from the qualified consultants or contact the writer at for consultation.

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