How Are Super Fees Calculated in Australia?

Understanding how super fees are calculated helps you compare funds accurately and see exactly how much you are paying. Australian super funds use a combination of fee structures, and the interaction between them can be complex.

The Main Types of Super Fees

1. Administration Fee

A fee covering the cost of maintaining your account — record-keeping, statements, call centres, and compliance. Can be:

• A fixed weekly/monthly dollar amount (e.g., $1.50/week = $78/year)
• A percentage of balance (e.g., 0.20% p.a.)
• A combination of both (most common)

Example:

“Administration fee: $65 per year + 0.15% of account balance” On a $100,000 balance: $65 + $150 = $215/year

2. Investment Fee

The cost of managing the investment option you are in — paying investment managers, research, and trading costs. Usually expressed as a percentage of assets (p.a.).

This varies significantly by option:

• Index/passive options: 0.05%–0.20%
• Active/diversified options: 0.30%–0.80%
• Alternatives-heavy options: 0.50%–1.20%

3. Indirect Cost Ratio (ICR)

Costs that are not charged directly to your account but reduce your investment returns. Includes underlying manager fees for unlisted assets (infrastructure, private equity), performance fees embedded in investments, and custody costs. Disclosed in the PDS.

4. Performance Fees

An additional fee charged when an investment manager exceeds a specified benchmark. Typically a percentage of the outperformance. Example: “20% of returns above the benchmark.”

Performance fees are often part of the ICR, not the headline fee.

5. Buy/Sell Spread

A transaction cost applied when you invest or withdraw. Compensates the fund for the trading costs of buying/selling assets to accommodate your transaction.

• On entry (buy spread): typically 0.00%–0.10%
• On exit (sell spread): typically 0.00%–0.20%

Buy/sell spreads are not a profit for the fund — they recover actual market transaction costs.

6. Switching Fee

A fee for changing your investment option within the fund. Most modern MySuper and large industry funds offer free switching. Some retail platforms charge per switch.

7. Advice Fee

An ongoing fee charged to your super account to pay for a financial adviser’s services. Must be consented to by the member and is regulated by ASIC. The fund must pass this directly to the adviser.

How to Calculate Your Total Annual Fee

To get the true annual cost:

1. Fixed admin fee (dollar amount, annualised)
2. + Administration fee % × your balance
3. + Investment fee % × your balance
4. + Indirect cost ratio (ICR) × your balance
5. + Any performance fees (may be averaged over several years for disclosure purposes)
6. + Buy/sell spread (only when transacting — not ongoing)

Example on $150,000 balance:

The Total Annual Fee Disclosure

Super funds in Australia must disclose a Total Annual Fee in the Product Disclosure Statement (PDS) and consumer dashboard in dollar terms for a hypothetical $50,000 balance. This allows comparison.

Since 2021, the MySuper Product Dashboard must show total fees for a $50,000 balance — making comparison easier.

Fee Comparison Tools

• APRA heatmap: apra.gov.au → Statistics → MySuper Statistics
• YourSuper comparison tool: moneysmart.gov.au → Super → YourSuper
• Fund PDS: Available on each fund’s website — check the “Fees and costs” section

Frequently Asked Questions

Does my super fund have to disclose all fees? Yes. Under the Corporations Act and ASIC’s Regulatory Guide 97 (RG 97), super funds must disclose all fees and costs in the PDS in a standardised format. This includes the administration fee, investment fee, ICR, performance fees, and buy/sell spreads. The standardisation makes direct comparison possible, though you still need to add up the components to get the total.

Is the investment fee charged even in a bad year? Yes. The investment fee and ICR are both percentage-based charges that reduce your returns regardless of whether the fund has a positive or negative year. If your option returns −5% gross and the investment fee is 0.5%, your net return is −5.5%. This is why fee minimisation matters most over long periods — the drag applies every year.

What is a “member fee” and is it the same as the administration fee? Some funds use the term “member fee” to describe the fixed dollar component of the administration fee (e.g., $1.50/week). Others use “account keeping fee.” These are all variations of the administration fee. The key difference is between the fixed dollar portion (which doesn’t scale with balance) and the percentage portion (which does). Smaller balances pay proportionally more in fixed fees.

Do employer contributions cover my super fees? No — employer contributions (SG) are paid into your account, and fees are then deducted from your balance and investment returns separately. Your employer is not required to pay anything toward fees. The SG rate (12% for FY2025–26) is the minimum mandatory contribution — your fees are your own responsibility to monitor.

Why do index options have much lower investment fees than active options? Index options passively replicate a market benchmark (e.g., ASX 200 or global equities index) using automated processes, requiring minimal research and low trading activity. Active options pay investment analysts and fund managers to identify outperformance opportunities. Whether active management is worth the extra cost depends on whether net returns (after fees) exceed comparable index options over 10+ years.

Can fees be paid in different ways — from contributions or balance? Most fees are deducted directly from your account balance or netted off investment returns. Some fixed administration fees are deducted from cash contributions when they arrive. Buy/sell spreads are applied at transaction time. There is no way to pay fees externally — they are always deducted from within the super environment.

For more: How Much Are You Paying in Super Fees?, Indirect Cost Ratio Explained, Performance Fees in Super, Total Cost Ratio, How to Read Your Super PDS. For advice on your situation, speak with a licensed financial adviser via MoneySmart.