Generally, if you earn more than $450 a month with an employer, they must pay super at the current rate (9.25% at present) to a complying super fund for you. A complying fund is an Australian super fund that receives concessional tax treatment because it’s regulated under the relevant super legislation and body (ATO or APRA) (and hasn’t been issued with a notice of non-compliance). You and a spouse or someone else can also contribute to super, as well as salary sacrifice via your employer. Those are the 4 main ways.
The ATO overseas most super tax compliance, and it’s website summarises the main conditions of eligibility to choose, when you can’t choose, and what types of funds your employer and you can generally contribute to.
From the ATO page on Choosing a super fund –
Eligibility to Choose a Fund
You’re generally eligible to choose a super fund for your super guarantee contributions if:
- Your super is paid under a federal award or a former state award, now known as ‘notional agreement preserving state award’;
- You’re employed under another award or agreement that doesn’t require super support; or
- You’re not employed under any award or industrial agreement (including contractors paid principally for their labour).
If you’re eligible to choose a fund, your employer must give you a Standard Choice Form so you can make that choice in writing.
You may also be able to choose how your savings are invested. Some fund investment strategies offer higher returns with higher risks, while others offer greater security for your money but with lower returns.
You may wish to speak to an independent qualified super professional to decide your investment strategy.
When You Can’t Choose Your Super Fund
You’re not eligible to choose the super fund you want your super guarantee contributions paid into if:
- Your super is paid under a state award or industrial agreement;
- Your super is paid under certain workplace agreements, including some Australian workplace agreements (AWA);
- You’re a federal or state public sector employee, excluded from super choice by law or regulations;
- You’re in a particular type of defined benefit fund or have already reached a certain level of benefit in that super fund.
For more information, refer to Choosing a super fund.
For help comparing super funds, visit ASIC’s consumer website – MoneySmart – at moneysmart.gov.auExternal Link and use their super calculator.
If you’re not sure what award or industrial agreement, if any, you’re covered by:
- Visit the Fair Work website at fairwork.gov.auExternal Link
- Phone the workplace relations department in your state or territory.
Types of Funds
There are five basic types of funds. However, funds decide who can join.
- Public sector Funds: These funds are generally open to Commonwealth, state and territory government employees.
- Corporate Funds: These funds are generally only open to people working for a particular employer or corporation.
- Industry Funds: These funds are sometimes open to everyone. Otherwise, you can join if you work in a particular industry or under a particular industrial award and your employer signs up with the fund.
- Retail Funds: These funds are open to everyone. They are run by financial institutions.
- Self-Managed Super Funds (also called SMSFs): SMSFs work like any other super fund, but the responsibility of managing it rests solely with the trustee (you).
For more information about comparing super funds, visit ASIC’s consumer website – MoneySmart – at moneysmart.gov.auExternal Link and use their super calculator.
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