What is superannuation?
Superannuation (or just Super) is fund that is used to provide for your retirement. It is made up of contributions from your work life. It is compulsory for your employer to make contributions of at least 10.5% of your ordinary time earnings to your superannuation fund at least every 3 months, if you earn over a certain amount. This is called the Superannuation Guarantee. You can also make voluntary contributions to your super from your own income.
Superannuation does not come out of your ordinary wages, it is an amount that your employer must pay ON TOP OF YOUR WAGES. Superannuation contributions made by your employer go directly into your superannuation fund to save for your retirement.
Please note, this article covers the minimum Superannuation Guarantee. Some Awards and Agreements may provide for a higher rate of super, or for it to be paid when you earn less per month. For advice, get in touch with us!
Are you eligible for super contributions?
As of July 1, 2022, your employer MUST be making contributions to your super, no matter how much you earn. There is an exception when:
You're under 18, at which point you need to work more than 30 hours in a week to be eligible to earn super.
Checking your super
Superannuation is important as it makes up a large part of your income once you retire. This is why its always a good idea to keep an eye out for wage-theft in the form of stolen super.
First you have to know the superannuation rate that you're entitled to. Most awards will have the minimum rate of 10.5% as your entitlement but if you are employed on an agreement you could be entitled to a higher rate of super.
The best way to make sure your employer is making the compulsory contributions is to check for the superannuation contributions listed on your payslip. Superannuation contributions must be included on your payslip. If you're meant to be receiving super but aren't seeing it on your payslip, there's a good chance you're being ripped-off.
Another way to check that your employer's contributions are being made is by going directly to your superannuation fund. You can check out your fund online and see every contribution that has been made.
Many superannuation funds also provide things like life insurance so make sure to check that out too.
Get in touch with us if you think that you haven't been paid the super you are entitled to - it's part of your wage, after all.
Consolidating your Super
Its important to always make sure all of the super you have collected from every job you have worked is in the one account. There are 2 reasons for this:
Compounding interest: once your super has been paid to your account, it collects interest based on the amount in the fund. This interest compounds which means that you will earn super if you have it all in one account rather than having several accounts each with a smaller amount.
Fees: superannuation accounts tend to charge fees for management as well as different kinds of insurance. To minimise the amount you are paying in fees, you should get rid of any funds that you aren't actively contributing to.
Its a good idea to take your superannuation account with you to any new job you get. You have the right to chose your own fund to which your employer must then contribute. If you already have multiple accounts from different jobs, you can consolidate them through the Australian Taxation Office.
Alex is 17 and works at a bakery in the city. He usually only works 2-3 hours on the weekend. Over the summer break Alex was asked to fill in for a sick co-worker throughout the week as well as doing his regular weekend shifts. Due to the additional hours, for one of the weeks he ended up working 33 hours. But when he got his payslip it showed that his employer hadn't made any super contributions for him.
This is not okay. Pay slips have to show superannuation payments. Alex, who is under 18, should receive super contribution when working over 30 hours a week, according to the Superannuation Guarantee. Unpaid superannuation is a common example of wage-theft.
What to do if you're not getting paid properly?
If you think you are not being paid properly, get in touch with us. We can give you advice about what you are entitled to, and help you decide what to do. We can also direct you to other people who can help.
* For those under 18 years are only paid this guarantee when working more than 30 hours in a week.