What is superannuation?Super is a long term savings plan that you undertake throughout the course of your working life to ensure you can live comfortably in retirement. Most Australian employees receive an amount of 9% of their salary, called the ‘superannuation guarantee’ which is contributed to a super fund by their employer. Whilst you are working, your super savings grow because money is paid into your super account regularly, which can be invested through your super fund The best thing about super is the fact that Australians get loads of tax benefits and government incentives for contributing to super. The tax you pay on money entering your super account and on any earnings is generally capped at 15%. Compare this to the tax you could pay on income earned outside of super, for example, your salary, which could be up to 46.5% (including the Medicare Levy)! As far as saving for your retirement goes, there are more reasons to invest ‘in’ super than ‘outside’ of it. Tax paid on income earned outside super
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The maximum tax charged within the superannuation framework is 15%. This is more attractive than the tax charged on income earned outside super, as you can see in the table above. As you can see, placing your money in super means it can grow faster as you can pay less tax.
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Click here to learn about compulsory super, or use the menu on the left to navigate through other super educational information.