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:
- Fixed admin fee (dollar amount, annualised)
- + Administration fee % × your balance
- + Investment fee % × your balance
- + Indirect cost ratio (ICR) × your balance
- + Any performance fees (may be averaged over several years for disclosure purposes)
- + Buy/sell spread (only when transacting — not ongoing)
Example on $150,000 balance:
| Fee component | Rate | Annual cost |
|---|---|---|
| Fixed admin fee | $78/year | $78 |
| Admin % | 0.15% | $225 |
| Investment fee | 0.35% | $525 |
| ICR | 0.08% | $120 |
| Total ongoing fees | $948 (0.63%) |
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
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.