Building your super

It’s all about setting up the future you want. Putting a little towards your super today, could mean a lot for you tomorrow. At the very least, you have your employer Superannuation Guarantee (SG) contributions, which are a great start for building your super for your retirement.

Every little bit helps

Pay yourself forward! Even small amounts that are set aside can make a huge difference over the long term. A small amount could make a big difference. Find out more about how you can build your super below.

What type of lifestyle do you picture for yourself?

What does a comfortable retirement look like to you? Even if your ideal future changes every year, it’s worth thinking about it today so you can plan how much money you’ll need to maintain your preferred lifestyle.

For a rough idea, the Association of Superannuation Funds of Australia's retirement standard, states that for a 'comfortable' retirement:

Single people will need $595,000 in retirement savings
Couples will need $690,000

What is the difference between a comfortable retirement lifestyle and a modest one? It depends on your definition. To help you think about it, we’ve pulled the following comparisons together.

	Comfortable lifestyle	Modest lifestyle	Age pension
Private health insurance	Top level private health insurance, doctor/specialist visits, pharmacy needs	Basic private health insurance, limited gap payments	No private health insurance
Internet and mobile	Fast Reliable internet/telco subscription, computer/android mobile /streaming services	Basic mobile, modest internet data allowance	Very basic mobile and limited internet connectivity
Car	Own a reasonable car, car insurance and maintenance/upkeep	Owning a cheaper, older, more basic car	Limited budget to own, maintain or repair a car
Leisure activities	Regular leisure activities including club membership, cinema visits, exhibitions, dance/yoga classes	Infrequent leisure activities, occasional trip to the cinema	Rare trips to the cinema
Home repairs	Home repairs, updates and maintenance to kitchen and bathroom appliances over 20 years	Limited budget for home repairs, household appliances	Struggle to pay for repairs, such as leaky roofs or major plumbing problem
Haircuts	Regular professional haircuts	Budget haircuts	Less frequent haircuts, or self-haircuts
Utility costs	Confidence to use air conditioning in the home, afford all utilities	Need to keep a close watch on all utility costs and make sacrifices	Limited budget for home heating in winter
Eating out	Occasional restaurant meals, home-delivery meals, take-away coffee	Limited meals out at inexpensive restaurants, infrequent home-delivery or take-away	Only local club special meals or inexpensive take-away
Clothes	Replace worn-out clothing and footwear items, modest wardrobe updates	Limited budget to replace or update worn items	Very basic clothing and footwear budget
Travel	Annual domestic trip to visit family, one overseas trip every seven years	Annual domestic trip or a few short breaks	Occasional short break or day trip in your own city

Source: The Association of Superannuation Funds of Australia’s Retirement Standard

See how much you’ll have in retirement using our retirement simulator calculator.

Making contributions

There are several ways you can put money towards your super fund and save more for your future.

Spouse contributions
Let’s face it. Planning your future is more than planning for yourself. It’s also about your family. You can make super contributions for your spouse if they’re not employed or earn less than $40,000 p.a.

A spouse can be married or de-facto and there are possibly tax incentives available to those who are eligible.

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 (including fringe benefits and super contributions) for the financial year is less than $40,000
- The contribution is made to a complying superannuation fund for the income year
  
  Please note that the maximum $540 offset amount can only be received if the spouse is earning less than $37,000 p.a but if they are earning more than this amount, the tax off-set is progressively reduced until the tax-offset reaches zero for those spouses that are earning more than $40,000 p.a.
  
  Also important to note that you can’t claim this tax offset if:
  - Your spouse has exceeded their non-concessional contributions cap for the financial year
  - Your spouse’s super balance is $1.9 million (for 2023/24) or more on 30 June of the previous financial year in which the contribution was made
You can view this information here

Your personal circumstances will determine whether you end up paying less tax so check out the Australian Taxation Office (ATO) website for more information or discuss with your financial adviser.
Employer Super Guarantee contributions
If you are an eligible employee, your employer must pay your super on your behalf by law. These contributions are usually referred to as Superannuation Guarantee (SG) contributions.

Generally you’ll be considered an eligible employee if you are:
- At least 18 years old; and
- A full-time, part-time or casual worker.
Here is what you need to know:
- From 1 July 2023, an SG contribution is 11% of your salary or your 'ordinary time earnings', including your benefits such as award payments, bonuses, commission and allowances.
- They are paid "before tax" and therefore make up part of your concessional contribution cap. Keep this in mind if you’re making additional contributions because there can be benefits and disadvantages with the amount you contribute each year.
- Employers must pay these contributions on your behalf at least four times a year, by the quarterly due dates. It's a good idea to log in to your super once a quarter to make sure you’re receiving your payments from your employer. Missed payments have been known to happen so it pays to keep an eye on it.

Voluntary contributions

You have the choice to top up your superannuation account with money out of your own pocket. This is called making a 'voluntary' or 'personal' contribution.

There are 3 types of voluntary (personal) contributions:
Salary sacrifice	From 1 January 2020, salary sacrificed super contributions will not: reduce the ordinary time earnings that your employer is required to calculate your super entitlement on count towards the amount of super guarantee contributions that your employer is required to make in order for them to avoid the super guarantee charge. More detailed information is available on the ATO website You can make contributions to super from your gross salary and be taxed at a lower rate of 15% for this contribution. The 15% tax applies to the concessional contributions (include SG & salary sacrifice). You cannot claim the 15% tax benefit for amount over the cap in any one calendar year. Note: for people who earn over $250k they pay additional tax on SG and salary sacrifice contributions as part of their tax return process. More info on this in our fact sheet. All you need to do is tell your employer how much of your gross salary you’d like to put into your super and how often, and they’ll arrange this to go alongside your salary payment. Consider the concessional contribution caps that are applicable to you.
Tax deductible contribution	From 1 July 2017, if you're under 75, you can make a contribution to your super from your personal money and claim a tax deduction at tax time. When you claim a tax deduction on a contribution, that contribution will count towards your concessional contribution cap limit. This is the same as salary sacrificing, but you decide when you make the payment(s) and then claim back the tax benefit when you do your tax return. Consider the concessional contribution caps applicable to you. You may need to pay extra tax on amounts in excess of these caps.
After-tax contribution	If you have maxed out your concessional contribution cap, or you want to take advantage of the government co-contributions scheme, then you can make a contribution to your super from your personal after-tax savings. You do this if you have some extra money you’d like to put into your super. There is no additional tax claim you can make for this money, but of course it’s additional money in your super fund. For those that are under 75 years of age, the bring forward rule applies whereby $330,000 in non-concessional contributions can be made over a 3-year rolling period from 1 July 2021. More detailed information is available on the ATO website. The current maximum non-concessional (after-tax) contribution cap is $110,000 for the 22/23 financial year and applies to all ages.
Co-contributions
Co-contributions	If you earn less than $58,445 and you make an after-tax contribution to your super (see after-tax contribution), the government will contribute up to 50c for every dollar you put in up to a maximum of $500 (the amount the government contributes is dependent on your income). All you need to do is make an after-tax contribution and, as long as your super fund holds your Tax File Number (TFN), your co-contribution will automatically be paid into your fund.

Salary sacrifice

You can boost your super balance and potentially save on tax by contributing an extra amount of your salary to your super. This is called salary sacrificing. For most people, this will be taxed at a lower rate of 15% and contributes to your concessional contribution cap.

All you need to do is ask your employer to pay some of your gross salary into your super fund—you decide how much. But remember there are contribution caps you need to keep in mind. If you go over these there could be additional tax you will be required to pay.

The maximum rate your super contributions from your employer (SG contributions) are taxed at is 30% (where adjusted taxable income is above $250,000), provided you don’t top the 'before tax contribution cap' for the year. That means any Salary Sacrifice contributions you make are deducted from your Taxable Income.

Just remember, superannuation contributions have to remain in a super fund until you meet a condition of release such as reaching 'preservation age' and may be subject to tax at time of exit. The 11% employer contribution may be impacted by your decision to make salary sacrifice contributions. A concessional contribution cap of $27,500 p.a. applies in 22/23 financial year.

Any salary sacrifice amount over the concessional contributions cap will be taxed at your income tax marginal rate. For more information, head to the ATO website. The scenario above is an example only, actual benefits may vary and will depend on individual circumstances.
Government co-contributions
For those who are eligible, the government co-contribution initiative is a great way to build up your super. It’s done by making personal contributions from after-tax money. The income thresholds for the co-contribution are raised annually. Based on the figures that apply for FY 23/24, if you contribute money into super from your after-tax income and earn less than $58,445, you could be entitled to a co-contribution from the government. Whether you are an employee or self-employed, this co-contribution could be as high as $500 ($1,000 of personal contributions and $500 in govt co-contribution). This is an annual opportunity so, providing you meet the criteria, you could receive it each year.

To be eligible you generally need to:
- Make a personal (after-tax) contribution to your superannuation
- Earn less than $58,445
- Earn 10% or more of your income from carrying on a business, eligible employment or both
- Have a total superannuation balance at 30 June of the previous financial year (including any pension balances but excluding any structured settlement amounts) that is less than $1.7 million for the 2022/2023 financial year or less than $1.9 million for the 2023/2024 financial year.
- Have not exceed your non-concessional contributions cap in the relevant financial year
- Lodge an income tax return for the year you have earned your income
- Ensure your super fund has your tax file number
- Be under 71 years old at the end of the financial year
- You did not hold a temporary visa at any time during the financial year (unless you are a New Zealand citizen or it was a prescribed visa)
If you’re eligible and your income is less than $43,445 for FY 23/24 you could receive $0.50 for every after-tax dollar you contribute to superannuation from the government up to the maximum co-contribution of $500.

The co-contribution decreases by 3.33 cents for every dollar you earn over $43,445, reaching zero when you earn $58,445 for FY 22/23. They are measured from your assessable income plus your fringe benefits.

Note: These income levels are for the 23/24 financial year. The income thresholds are indexed annually.

Keep in mind that contribution annual caps can add up across different super accounts and types of contributions.

If you would like more information on government co-contributions and the eligibility criteria please visit the ATO
Consolidate

Get the most out of your super in the long term by consolidating your funds. Find out about the benefits and methods in our consolidating super section.