What Is Superannuation (Super)?
Australia's compulsory retirement savings system. Employers must contribute a percentage of an employee's ordinary time earnings into a super fund. The Superannuation Guarantee (SG) rate is 12% from 1 July 2025.
Definition
Superannuation (super) is Australia's compulsory retirement savings system, managed through regulated super funds. As of 1 July 2025, the Superannuation Guarantee (SG) rate requires employers to contribute 12% of an eligible employee's ordinary time earnings (OTE) to their chosen super fund. Contributions are generally taxed at 15% (concessional tax rate) rather than the individual's marginal rate, making super a tax-effective savings vehicle. Funds accumulate through investment returns and compound over a working life. Members can access super upon reaching preservation age (currently 60 for those born after 1964) and retiring, or meeting another condition of release.
Example
On a $80,000 salary, your employer contributes 12% x $80,000 = $9,600 to your super fund per year. Over 30 years at 7% return this grows to approximately A$907,000.