Superannuation, or “super,” is a system in Australia designed to help individuals accumulate savings throughout their working life to fund their retirement. Under Australian law, employers are required to contribute a percentage of an eligible employee’s earnings into a nominated super fund.
These contributions, along with any voluntary contributions made by the employee, are invested by the fund and grow over time, forming the financial foundation for retirement.
In Australia, superannuation is governed by the Superannuation Guarantee (Administration) Act 1992 and managed under the oversight of the Australian Taxation Office (ATO). Contributions are usually made regularly by employers and can be supplemented by employees via salary sacrifice or after-tax contributions.
The funds are managed by superannuation providers, which invest the money in various asset classes including shares, property, and cash.
As of the 2024–25 financial year, the Superannuation Guarantee (SG) rate is 11.5% of an employee’s ordinary time earnings (OTE). This will increase to 12% by July 2025.
Employers must contribute a mandated percentage of their employees’ gross wages to a super fund. This is known as the Superannuation Guarantee (SG).
Employees can boost their super through:
Super funds are institutions licensed to manage and invest super savings. Types of funds include:
Funds invest the pooled contributions into a diversified portfolio to generate returns. The growth of your super is influenced by market performance and investment strategies chosen.
Generally, an employee is eligible to receive super contributions if they:
Contractors may also be eligible if the work arrangement is considered that of an employee for super purposes.
Superannuation is not just a government requirement, it’s a vital part of financial planning. It allows employees to:
Employers benefit by:
Modern HR and payroll systems, like Microkeeper, automate superannuation management by:
Explore more about Microkeeper's payroll features
Superannuation is generally preserved until the employee reaches preservation age (between 55 and 60, depending on date of birth) and:
Access can also occur under special circumstances such as severe financial hardship, permanent incapacity, or terminal illness.
Since 2021, the stapled super fund reform means that employees take their existing super fund with them to new jobs, preventing duplicate accounts and unnecessary fees.
Employers must request stapled fund details from the ATO if a new employee does not choose a fund.
Yes, if they meet the eligibility criteria based on age and earnings.
Yes, employees can choose their preferred fund and notify employers using the Standard Choice Form.
Employers may face penalties, interest charges, and administrative fees from the ATO.
While legally due quarterly, Payday Super reforms will require super contributions to be made with each pay cycle starting 1 July 2026.
Superannuation is a cornerstone of the Australian workforce benefits system, ensuring employees retire with dignity and financial stability. For employers, managing super effectively is a legal and ethical responsibility that can be simplified through technology and automation.
Microkeeper’s all-in-one payroll solution helps you stay compliant, pay accurately, and support your staff’s long-term financial health—without the administrative headache.
Disclaimer: This article is intended for general informational purposes only and does not constitute financial or legal advice. Please consult the ATO or a licensed financial adviser for guidance specific to your situation.
