Superannuation is a compulsory pension scheme. It is mandatory for all employees between the age of 17 and 70 and earning more than $450 a month.
All employers have to contribute a certain amount to a superannuation fund, which can be accessed when the employee retires. The current superannuation rate is 9.5% of the salary, which rate won’t change until 2021. Then it will be gradually increased by 0.5% year-by-year until it reaches 12% in 2025.
Individuals can choose to make an extra voluntary contribution to their superannuation fund, and receive tax benefits for doing that. In the 2017-2018 income year, the cap is $25,000, which includes both the employer contributions and the personal contributions. If the employee has more than one fund, all concessional contributions made to all funds are added together and counted towards the concessional contributions cap.
The salary is often quoted as a ‘package’ where the total figure includes the superannuation contribution. In this case, the contribution must be deducted from the salary, as there is no tax charged on the superannuation contribution.
Superannuation rates are the following:
|2025 and onwards||12.0%|