If you are unfamiliar with how superannuation works, this article is for you.
In Australia, superannuation is the term the Australian Government used for the structure to assist Australians in accumulating money for an income in retirement. It is largely compulsory and is encouraged by tax benefits.
There are minimum standards set by the government for contributions by employees as well as for the super funds’ management. For employers, it is compulsory to make superannuation contributions for their employees in addition to the wages/salaries of the employees.
As for other Australians, they are encouraged to supplement super contributions with voluntary contributions. Also, they are incentivised into putting their salary income or wages into superannuation contributions under salary sacrifice arrangements.
Once a person meets one of the conditions of release which includes retirement, permanent incapacity, or terminal medical condition, he or she can withdraw funds out of a super fund as stated in the Superannuation Industry Regulations 1994.
Simply, superannuation Australia is a way of saving for your retirement. You (and your employer) can work on the contributions that will then accumulate over time and be invested in shares, properties, bonds, and other investments.
Superannuation Guarantee
This became operational way back on July 1, 1992. It is the contribution that an employer must provide for the super fund of an employee. However, in some cases, employers might need not to pay the Super Guarantee such as when the employees are under the age of 18 but work 30 hours per week or less, paid to do private or domestic work for 30 hours per week or less, and earn less than $450 per month.
There are also situations where employers may make payments above the superannuation guarantee to serve as a reward for the performance of a worker, a co-payment, or a salary sacrifice.
To learn more about superannuation Australia, contact us today!
