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New to Australia? Here are the basics on superannuation

New to Australia? Here are the basics on superannuation

If you’re new to the country you’re probably also new to the concept of superannuation.

But if you do start working, it’s important to know about super and your employer’s responsibilities.

To help you get a head start in Australia, we’ve answered some key questions about super, as we commonly call it.

What is super?

Superis a way to save for your retirement and is mainly made up of money your employer contributes into a super fund while you work.

If you’re eligible, your employer should be paying 9.50%^ of your salary into super. And while in super, your money can be invested in a range of investment options of your choice, including cash or shares.

Throughout your working years, this money ‘adds up’ until it’s ready to be accessed, which is usually when you retire.

Should I be receiving super?

Whether you’re working full-time, part-time or casually during your time in Australia, generally your employer is required to pay you super for work performed in Australia, if:

  • You’re at least 18 years old
  • You make at least $450 before tax per month through working with that employer
  • You’re not a foreign executive holding certain visas or entry permits which excludes super payments.

If you’re unsure about your eligibility, speak to your employer or the Australian Taxation Office (ATO).

What happens if I leave the country permanently?

If you’re on a temporary visa*, and it expires or you leave the country permanently, you may be eligible to request your super to be paid to you directly, once you leave the country. This special type of super payment is called a Departing Australia Super Payment (DASP). You should note that tax may apply when you receive a DASP payment.

To claim for your super, you will need to complete the temporary resident’s online application form on the ATO website.

If you are an Australia or New Zealand citizen or permanent resident you do not have access to DASP.

Our top three tips for those new to super

  1. Get to know your super fund
    Find out more about your super fund so you can stay on top of your super. Things like the fees charged and investment options available can be useful information for all members. Some super funds may even offer an online service to manage your account, such as NetBank for Essential Super customers.
  2. Ensure your super fund has your TFN
    If you’re planning to work in Australia apply for a Tax File Number (TFN) as soon as you can.  And when you do get a super account, ensure your fund has a record of your TFN. This will help you avoid high tax rates.
  3. If you change jobs, take your super with you
    When starting a new job, it’s important not to forget your super.  Your new employer generally needs a completed Super Choice form with your details to start making your super payments to your chosen account.
    If you’re a member of Essential Super, you can download a pre-completed one anytime in NetBank. This will ensure you don’t end up with multiple accounts if it comes time to leave or retire.

^9.50% as at 2014-2015 financial year. *Except holder of visa subclass 405 (investor retirement) and 410 (Retirement) This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs.