Making your super work harder for you
Build your super
Working out how to start building on your super balance once you've joined a super fund can be tricky, so we've provided some options for you to consider.
One of the smartest ways to manage and maximise your superannuation is by regularly contributing. Here are some of the options.
9% Employer contributions
Most likely, you'll start superannuation when you start working for the first time. This is because if you're an eligible employee, your employer is required by law to pay contributions on your behalf. These contributions are usually referred to as Superannuation Guarantee Contributions (SGC).
Generally you’ll be considered an eligible employee if you are:
- between 18 and 69 years of age inclusive;
- paid $450 (before tax) or more in a calendar month; and
- a full-time, part-time or casual worker.
An SGC is typically 9% of salary or your ordinary times earnings, which could include award payments, bonuses, commission and allowances.
Employers are required to pay these contributions on your behalf by a cut off date quarterly.
If you're an existing member, go to the Manage my super section to find out how to get your contributions started.
Whether your employer is already making contributions on your behalf or if you're self employed, you have the choice to top up your superannuation account with money out of your own pocket. This is referred to as making a personal contribution.
Find out more information on the types of personal contributions you can make and their associated caps.
If you are self-employed
Self-employed people can choose whether or not they wish to have superannuation. However you may want to consider superannuation as a way of saving for your retirement.
In most cases, self-employed people can claim a full tax deduction on contributions made up to age 75. Directors who receive salary or wages are generally entitled to superannuation contributions from their employer, provided they meet the eligibility requirements.
If you are a contractor that is hired wholly or principally for your labour and you’re not free to engage other businesses to perform the work, your employer may be required to pay your superannuation contributions, regardless of whether or not an Australian business number (ABN) can be quoted.
The government offers a co-contribution incentive to help boost your super savings. So if you earn less than $61,920 p.a., you may be able to receive a co-contribution from the government by making eligible personal superannuation contributions to your super fund.
If your ‘total income’ is $31,920* or less and you make a personal contribution of $1,000 or more, you may be able to receive the maximum co-contribution ($1,000). If your ‘total income’ is less than $61,920*, you may be able to receive a smaller co-contribution. Your ‘total income’ includes your assessable income, reportable fringe benefits and reportable employer superannuation contributions (eg. Salary sacrifice contributions).
Other eligibility criteria may also apply - for full criteria, go to the Australian Taxation Office (ATO) website.
*Thresholds apply for the 2009/2010 year and may change in future years. Go to ato.gov.au for up to date information.
If your spouse is unemployed or earns less than $10,800 p.a., you can help build their retirement savings by contributing to their superannuation.
Spouses can be either married or de-facto and there are possibly tax incentives available to those who are eligible.
With spousal contributions you may be able to claim an 18% tax offset on super contributions of up to $3,000 on behalf of your spouse.
You may even be entitled to a tax offset of up to $540 (maximum) each financial year if:
- you do not claim a tax deduction for the contribution;
- at the time the contribution is made, both you and your spouse are Australian residents and live together on a permanent basis;
- the sum of the spouse's assessable income and total reportable fringe benefits amount for the financial year is less than $13,800; and
- the contribution is made to a complying superannuation fund for the income year.
Further to making contributions for your spouse, you can also split your own superannuation contributions with your spouse.
Your personal circumstances will determine whether you could end up paying less tax so check out the Australian Taxation Office (ATO) website for more information.