Super Facts

The Super Facts and why it is so important to invest in your super knowledge.

1. When you start a new job

Your employer should ask you the name of your super fund. If you don’t have one, they’ll choose one for you.

Even if you are a member of an Industry fund you could be paying more in fees than you need to. Make sure you use our comparator to compare the fees of all the super funds.

One simple form is all it takes.
If you’ve changed employers, you may have super in more than one fund. Each of those funds will be charging you fees.

2. Tax on your contributions

The amount of tax you pay on contributions into your super depends on how much you contribute and when you contribute it.

Type of contribution Tax (2012/13)
Before-tax

  • Employer Superannuation Guarantee
  • Salary sacrifice
  • 15% on amounts up to $25,000 a year
  • 46.5%* on amounts more than $25,000 a year
After-tax 0% on amounts up to $150,000 a year
46.5%* on amounts more than $150,000 a year†
If you’re under 65:

  • You can contribute up to $450,000 over a three-year period tax-free as long as you contribute no more in that three-year period.
  • The three-year period is automatically triggered in the year you first exceed the $150,000 after-tax contribution limit.
  • Any contributions over $450,000 in that three-year period will be taxed at 46.5%.*
The Work Test requires people aged 65 to 74 years to have worked 40 hours in a 30 day consecutive period to be eligible to make contributions to super. You can make any type of contributions to super to the age of 75, excluding the Superannuation Guarantee (SG).
Members who earn over $300,000 a year may pay 30% tax on some or all of their before-tax contributions.

If your income# is less than $300,000 a year, but is more than $300,000 when you include your before-tax contributions, the 30% tax rate will apply to the part of your before-tax contributions that take you over the $300,000 threshold.

For example if your income is $280,000 and your before-tax contributions are $25,000, you only pay the 30% tax rate on $5,000.

Withdrawals from Super are tax-free if you are aged 60 or over. Tax rates on lump-sum withdrawals for members under 60 are outlined below:

Super benefit component^ Tax
Tax-free No tax payable
Taxable If aged under 55, taxed at 21.5%*.

If aged between 55 and 59 years, the first $175,000 is tax free and the balance is taxed at 16.5%*.

Tax on withdrawals is deducted before you receive your payment.
* Including the Medicare levy
^ The tax-free and taxable components are calculated from the type of contributions that have been made to your account. To find out how much of your super is tax-free and how much is taxable you can log in and get a benefit quote or call us on 1300 300 273.

Investment earnings in super are taxed up to 15%. This tax, along with investment management fees, is deducted before your investment earnings are applied to your account. Earnings are applied to your account every 12 months or when you transfer out of the Fund or switch investment options.
If you haven’t given us your Tax File Number (TFN), you’ll pay more tax – up to 46.5%* on your before-tax and your employer’s SG contributions.

Super funds can’t accept any after-tax contributions from you if you haven’t provided your TFN.

The definition of ‘income’ for the purpose of this measure will include taxable income, concessional superannuation contributions, adjusted fringe benefits, total net investment loss, target foreign income, tax-free government pensions and benefits, less child support.

We all know that most people insure their important assets, like their car, their home, their home contents. But their biggest asset – their future income – is often left unprotected.

“Eighty-three percent of Australians insure their car but only 31% have income protection insurance. Having income protection insurance means your salary is protected if you are temporarily unable to work because of injury or disability. Of course we all think we’re bulletproof and believe it’s not going to happen to me, but stop and think about it for a minute. If it did, where would it leave you and your family if your income stopped?”
Source: Australian super 2012.

So how much cover do you need? The three main factors to consider are: your income, your current debt such as credit cards and personal loans, and your mortgage payments. In the event of your death you’ll need to consider whether your insurance will be enough to cover all of these commitments. If you become permanently disabled there are even greater costs to meet. In addition to covering your debts, your insurance needs to cover your cost of living and any long term care you may require, including modifications to your home if necessary.

To help work out how much insurance cover is right for you, use our calculator