Superannuation is a way to save money for the future. If you work, no matter if it is a part time or a full time job, if you’re between 18 and 70 years old and if you earn more than 450$ per month, you can get superannuation. Now, every employee can choose the super fund that will get super contributions under superannuation guarantee.
Top 10 must-know Australian superannuation rules:
Superannuation guarantee – According to the superannuation guarantee law, the employer must add money to your member account in a super fund on your behalf. The obligatory employer contributions are also called SG – superannuation guarantee contributions. These SG contributions count to your concessional contribution cap.
Concessional contribution tax – The employer’s obligatory SG contributions and other before tax contributions, are taxed minimum 15% when the superannuation contributions enter the super fund.
Tax rate on the investment earnings – The earnings on your super fund investments are also taxed, but no more than 15%.
Co-contribution – Co-contributions means that regardless of your income, if you make non concessional contributions to your super fund, the government can put tax free money into your super fund.
Contribution caps – The amount of the super contributions is limited. If you make super contributions that go above the limit, you will be obligated to pay penalty tax – excess contributions tax.
Another important superannuation Australian rule you have to know is that you can choose your Super fund – Generally, you can choose whatever super fund you want. In case you don’t choose your super fund, your employer will choose the super fund for you.
Investment choice – This means that in most of the cases, you can decide about the invested money by the super fund. If you don’t make the investment choice, your money will be invested in a default (standard) investment option.
Report – The super fund must send you regular reports on the fund and on your own super account performance.
Maintenance (preservation) – Your money are kept in the super and this means that you can not take your money until you retire or after your preservation age (55 – 60 years of age), depending on the date of birth.
Free tax for over 60 years of age – If you retire after the age of 60, you will not pay any tax on your superannuation benefits.