How does superannuation work?

Superannuation, or super, refers to the money you’ve saved for retirement.

CommBank has worked with Colonial First State (CFS) to offer Essential Super which you can view in the CommBank App alongside your banking. Explore Essential Super1 and its range of investment options.


In Australia, when you’re working, it’s compulsory your employer makes payments, called contributions, into a superannuation account for you.

This amount is separate to the income you’re paid. You can choose which superannuation fund your super is paid into.

You can also add to your super account by making voluntary contributions.


Think of super as a long-term investment.

Your super fund will manage and invest the money in your super account so it may grow over time.

You can choose how your super is invested. You can also change super funds and move your super from one account to another.



You can withdraw your super once you’ve reached your ‘preservation age’ and retire, usually between 55-60 years old, depending on your date of birth.

At 65 years old, you can access your super regardless if you are still working. It is also possible to apply for early access to your superannuation under some circumstances.

Read super withdrawal FAQs

Grow your superannuation

Your employer is required to make contribution payments to your super account called Super Guarantee or 'SG' contributions. As at 1 July 2023, the minimum SG rate is 11% of your pre-tax earnings.

When you move to a new job and you don’t nominate a super account to start receiving your contributions in, your employer will be required to pay your contributions into your existing eligible super account (your ‘stapled super fund’). Refer to the ATO website for more information.

Your employer is legally required to pay your super at least every three months. If you’d like to check when and where your super is being paid, refer to your payslip, which should list out these details. You can also check your contribution details through myGov (linked to the ATO). 

If you’ve changed jobs you may have multiple super accounts with different funds.

In this case, you’re probably paying multiple sets of fees which can make a dent in your retirement savings in the long run. Having more than one account can make it harder to keep track of your super.

It’s a good idea to find any other super accounts you may have and consider bringing them together into one account to avoid paying more fees than you need to.

In Australia, you can find and consolidate your super online via the ATO in your myGov account


You can help your super balance grow by making your own contributions. There are a number of ways to make additional super contributions.

Read this article for a guide on different super contributions and caps.

A popular way to boost your super is by salary sacrificing2, an arrangement between you and your employer to pay a bit extra from your pre-tax salary into your super. This is on top of the Super Guarantee contributions your employer is legally required to make. Pre-tax super contributions are called ‘concessional contributions’. Your annual concessional contribution cap is $27,500 and this includes your SG contributions, salary sacrifice as well any personal contributions you claim deduction on.

Personal contributions are made using your after tax income. These contributions are counted towards your non-concessional contribution cap. Your annual non-concessional cap is $110,000.

Note, your actual contribution limits may vary depending on a number of factors including your past contribution amounts. It’s a good idea to keep track of the contributions you’ve made and you should consider speaking to a financial advisor to better understand your position because contributions made in excess of your limits may result in additional tax.

Depending on the ways you choose to contribute to you super, there are ways to save on tax. Refer to our article ‘Five ways to save tax using superannuation’.

Did you know?

  • If you make a personal, after tax, super contribution and are a low income earner, you may be eligible for the government superannuation co-contribution amount.

    For those eligible, the government may contribute 50 cents for every dollar of your personal superannuation contribution, up to $500 a year.

    For eligibility requirements check out the ATO website.

  • Any amount you salary sacrifice into super is generally taxed at the rate of 15%. For some people, this will be lower than your marginal tax rate, which could be up to 47%3

    For people on a high tax rate this is of benefit because you pay less tax while you boost your retirement savings.

  • Low income earners who are earning $37,000 or less may also receive the ‘low income superannuation tax offset’ (LISTO), which effectively means the Government refunds the 15% contributions tax that applies to your concessional contribution by making a government contribution to your fund, up to $500 a year.

Superannuation investment

For most people, super will be one of their largest assets outside of the family home. Your super fund invests your money on your behalf so it will grow over time, ready for you when you retire.

Most super funds allow you to choose from different investment options, so it’s important to pick the right option for you. You can find this info on your super fund’s website or product disclosure statement (PDS). 

Everyone’s financial situation is different which is why one investment option may suit you better than another.

Some investment options are riskier than others, which generally means they offer higher returns. Typically, if you have longer to retirement, it’s more suitable to have a greater exposure to growth assets like shares, which are generally riskier than investing in cash. As an example, with Essential Super, the default Lifestage investment mix becomes more defensive as you get older so you don’t need to do this yourself.

Before making any major decisions around your investment options, it’s a good idea to seek professional advice. A financial adviser can review your finances and create a personalised super strategy to help you reach your retirement goals. 

It’s important to remember that super is a long-term investment. Your super balance will fluctuate up and down depending on the performance of the assets your super is invested in (e.g. shares, property, fixed interest). While investment market returns can be unpredictable in the shorter-term, historically, they typically grow over the long-term. Before you react and change your investment options, it’s important to consider your age, long term goals and risk appetite. Also, consider speaking to a financial adviser before you make any decisions.

You can view how your super is performing and your balance in your super fund account.

Superannuation fees and insurance

Your super fund charges fees to cover the costs of managing your account and your investments. These typically include an investment fee and an administration fee, although there may be other fees as well, for example, if you switch investment options.

Fees are generally deducted automatically from your account on a regular basis, such as monthly or annually. They may either be flat fees or they could be calculated as a percentage of your account balance which means they’ll increase as your balance grows.

It’s a good idea to check your superannuation statement and review the total amount in fees and costs you’re paying and whether the features you’re paying for are right for you.

If you’re not happy with the fees you’re paying or you think you want to change super funds, you can compare your super fund with others by looking at their product disclosure statements (PDS) or using the ATO’s YourSuper comparison tool.

Before changing funds, consider a number of factors, like super performance, investment options, fees and insurance offered. You can switch your super fund by submitting a rollover request (either to your existing super fund or new super fund) or via the ATO.

Most super funds offer insurance cover, typically life insurance (also called death cover), income protection, and total and permanent disability (TPD) cover.

Insurance cover is optional and the cost usually depends on the types and amounts of cover you have, as well as factors like your age and gender. Your insurance premiums are automatically deducted from your super balance on a regular basis, just like your other fees.

You should make sure you know what you’re covered for and whether this insurance suits your needs. To find out more, visit Moneysmart’s guide on insurance in super.

Read what to consider when choosing life insurance inside or outside super.

Superannuation withdrawal

There are special circumstances when you may be able to access some or all of your super early, for instance, on compassionate grounds due to severe financial hardship, if you’re permanently or temporarily incapacitated, or if you’re terminally ill.

Head to the ATO website to learn more about early access or compassionate release of super.

If you’re a temporary resident leaving Australia, you can also withdraw your super via a Departing Australia superannuation payment.

Once you’ve met a condition of release your ‘preserved’ funds become ‘unrestricted non-preserved’ funds which can be accessed by commencing an income stream (pension) or making a lump sum withdrawal. The option you choose may affect your financial circumstances, tax position and entitlement to social security and other government concessions and benefits, so it may be worth getting financial advice before making a decision regarding superannuation withdrawal.

When can I access my super?

Your super is designed to fund your retirement. That’s why you can’t touch it for most of your working life so it has the chance to grow as much as possible over the long term. Your funds are classified as ‘preserved’ until you met a condition of release.

The common ways to satisfy a condition of release is by:

  • Reaching 65
  • Reaching 60 and ceasing employment
  • Reaching your preservation age and retiring
Date of birth
Preservation age
Before 1 July 1960
From 1 July 1960 to 30 June 1961
From 1 July 1961 to 30 June 1962
From 1 July 1962 to 30 June 1963
From 1 July 1963 to 30 June 1964
On or after 1 July 1964

Things you should know

  • Any information provided by CBA may include general financial product advice but does not consider your individual objectives, financial situation, needs or tax circumstances, and so you should consider the appropriateness of the advice having regard to your circumstances before acting on it. You should read the PDS and the Reference Guides for Essential Super carefully and consider whether the information is appropriate for you before making any decision regarding this product.

    Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the Trustee of Essential Super ABN 56 601 925 435 and the issuer of interests in Essential Super. Essential Super is distributed by the Commonwealth Bank of Australia ABN 48 123 123 124, AFSL 234945 (the Bank). Colonial First State (CFS) is Superannuation and Investments HoldCo Pty Limited ABN 64 644 660 882 (HoldCo) and its subsidiaries which include AIL. The Bank holds an interest in CFS through its significant minority interest in HoldCo.

    This information is issued by AIL and may include general financial product advice but does not consider your individual objectives, financial situation, needs or tax circumstances. The Target Market Determination (TMD) for Essential Super can be found at and includes a description of who the financial product is appropriate for and any conditions on how the product can be distributed to customers. You should read the Product Disclosure Statement (PDS) and the Reference Guides for Essential Super carefully and consider whether the information is appropriate for you before making any decision regarding this product. Download the PDS and Reference Guides at or call us on 13 4074 for a copy. Neither the Bank, AIL, CFS, nor any of their respective subsidiaries guarantee the performance of Essential Super or the repayment of capital by Essential Super. An investment in this product is subject to risk, loss of income and capital invested. An investment in Essential Super is via a superannuation trust and is therefore not an investment in, deposit with or other liability of the Bank or its subsidiaries. Where we mention ‘we’, ‘us’ or ‘our’, we mean AIL.

    The insurance provider is AIA Australia Limited ABN 79 004 837 861, AFSL 230043 (AIA Australia). AIA Australia is not part of the Commonwealth Bank Group. The insurance cover is provided under policies issued to the Trustee.

    2 Contributions caps apply.

    The highest marginal tax rate is 45% plus 2% Medicare levy. Concessional contributions such as SG contribution and salary sacrifice are generally taxed at just 15% when received by your fund. However, an extra tax may be payable on part or all of these contributions if your income and before-tax contributions are more than $250,000 in a financial year.