If you have just started your first job — or have been working for a while but never really understood your super — this guide is for you. Superannuation can seem complicated, but the basics are straightforward. Getting a few key things right early can make a significant difference to your retirement savings over a lifetime.
What Is Super?
Super (short for superannuation) is Australia’s compulsory retirement savings system. When you work, your employer must pay an extra 12% of your wages into a special investment account in your name — your super fund. That money is invested on your behalf and is meant to be used when you retire.
Think of it as forced long-term savings. The government makes it compulsory because most people would otherwise spend that money today rather than save it for retirement.
The money in your super belongs to you. But you generally can’t touch it until you are at least 60 years old — and even then, only once you have retired.
Where Does Your Super Go?
Your employer pays your super contributions to a super fund. The fund takes your money, pools it with contributions from other members, and invests it in a mix of assets — mostly shares, property, and bonds — to grow it over time.
There are hundreds of super funds in Australia. Some of the largest include AustralianSuper, Aware Super, Hostplus, REST, and Cbus. Each fund offers different investment options, different fees, and different levels of insurance.
When you start a new job, you can either:
- Choose your own fund, or
- Let your employer use a default fund (or your existing “stapled” super fund from a previous job, if you have one)
What You Need to Do When You Start a New Job
When you start a new job, your employer will usually ask you to fill in a Superannuation Standard Choice Form. This is how you nominate which fund to use. You have a few options:
- Stay with your current fund — if you already have a super account, give your employer those details so all your super goes to one place
- Join a new fund — if you don’t have super yet, open an account with a fund you choose, then give your employer the details
- Do nothing — your employer will check if you have an existing “stapled” fund (via the ATO). If you don’t, they will place you in their default fund
Having multiple super accounts means paying multiple sets of fees for no extra benefit. If you have changed jobs and have old super accounts sitting around, it is worth consolidating them into one.
How Much Does Your Employer Pay?
For FY2025–26, employers must pay 12% of your ordinary time earnings into super. This is called the Superannuation Guarantee (SG).
Example: If you earn $60,000 per year, your employer must pay at least $7,200 into your super each year (on top of your salary).
This money does not come out of your pay — it is an additional cost your employer must cover.
Currently, employers pay super at least once per quarter. From 1 July 2026, under new “Payday Super” laws, employers must pay super every time they pay your wages.
How Your Super Grows
Your super doesn’t just sit in a bank account — it is invested. Over time, investment returns (and compounding) can dramatically grow your balance.
Compounding means your returns generate further returns. The earlier you start, the more time compounding has to work.
Here’s a simple example of how a $0 starting balance grows with 12% employer SG contributions and 7% average annual returns (illustrative only — actual returns will vary):
| Age | Annual salary | Super balance (approx.) |
|---|---|---|
| 25 | $60,000 | $0 |
| 35 | $70,000 | ~$55,000 |
| 45 | $85,000 | ~$175,000 |
| 55 | $90,000 | ~$390,000 |
| 65 | — | ~$680,000 |
Assumes SG at 12%, 7% annual return after fees and tax, salary growth of ~2%/year. For illustration only — past performance is not a reliable indicator of future performance.
Starting early matters more than most people realise. Even a few extra years of contributions and returns can add tens of thousands of dollars to your final balance.
Tax and Super — The Key Advantage
Super is one of the most tax-effective ways to save in Australia. Here’s why:
- Employer contributions and salary sacrifice are taxed at 15% inside super — much lower than the marginal income tax rate most working Australians pay (19%, 32.5%, or higher)
- Investment earnings inside super are taxed at a maximum of 15% — compared to your full marginal rate if you invested outside super
- Withdrawals after age 60 are generally tax-free
The tax savings compound over time, which is another reason starting early (and paying attention to your fund’s fees) matters so much.
Your Investment Option
When you join a super fund, your money goes into a default investment option — usually a “balanced” or “MySuper” option. This is a mix of growth assets (like shares) and defensive assets (like bonds and cash).
You can usually choose a different option that suits you. Common options include:
- High Growth — mostly shares, higher expected returns over the long run, but bigger short-term swings
- Balanced — a mix of growth and defensive assets
- Conservative — more bonds and cash, lower expected returns but more stable
- Cash — very stable, but barely keeps up with inflation over the long run
If you are young and have decades until retirement, many financial educators suggest that growth options have historically performed better over long periods — but what’s right for you depends on your personal situation. This is general information, not a recommendation. Consider speaking with a financial adviser.
Insurance Inside Super
Most super funds include default insurance cover — usually death cover and total and permanent disability (TPD) cover, sometimes income protection. This cover kicks in automatically when you join and the premiums come out of your super balance.
Having insurance through super can be cheaper than buying it independently, but the default cover may not be enough for your situation. It’s worth checking:
- What cover you actually have (check your fund’s app or annual statement)
- Whether the benefit amount would be adequate for your circumstances
- Whether you actually want the cover (if you are young and single with no dependants, you may prefer to turn it off to avoid eroding your balance)
What to Actually Do Right Now
If you are new to super, here are the most important first steps:
- Find out if you have a super account — log into myGov and link your ATO account. The ATO shows all super accounts held in your name.
- Consolidate old accounts — if you have more than one, merge them into your preferred fund via myGov or your fund’s website. Check you won’t lose insurance cover first.
- Check your fund — is it performing? Look at the 5-to-10-year net return (after fees). Use the ATO’s YourSuper comparison tool.
- Check your investment option — are you in a default balanced fund when you have 30+ years until retirement? You may want to consider your options.
- Nominate a beneficiary — tell your fund who should receive your super if you die. Without a nomination, the fund trustee decides.
Common Super Mistakes to Avoid
Ignoring it entirely. Super can feel abstract when retirement is decades away. But the decisions you make (or don’t make) in your 20s and 30s can have a $100,000+ impact on your retirement balance.
Having multiple accounts. Every extra account means extra fees. Consolidate when you can.
Staying in a poor-performing fund. Not all super funds are equal. If your fund consistently underperforms its peers after fees, it may be worth switching.
Not checking your super is actually being paid. Check your super account regularly to confirm contributions are coming in. If your employer isn’t paying, report it to the ATO.
Cashing out super early if you lose your job. Early access to super is only allowed in very limited circumstances. Accessing super under false pretences is a serious offence, and withdrawing super early can significantly damage your retirement savings.
Frequently Asked Questions
How do I open a super account? Most super funds let you apply online in a few minutes. You will need your Tax File Number (TFN), your address, and basic personal details. Once your account is open, give your employer your fund name, ABN, and account number.
How do I find lost super? Log into myGov and link your ATO account — it shows all super accounts held in your name, including any you may have forgotten. You can also search for lost super via the ATO super search tool.
What happens to my super if I lose my job? Your super balance stays in your fund. Your employer simply stops making SG contributions. Your balance continues to be invested and can grow or fall with markets. You do not lose your super.
Can I access super if I’m in financial hardship? In very limited circumstances, yes. You may be eligible for early release under financial hardship rules if you have been receiving certain government payments for a qualifying period. The rules are strict — the ATO provides full details at ato.gov.au.
Do I need to do anything with my super each year? At minimum, check your annual super statement when it arrives. Confirm contributions are being paid, your contact details are current, and your nominated beneficiary is up to date.
Related Guides
- Superannuation Guide Australia (2026)
- How Super Works in Australia
- Is Super Compulsory in Australia?
- How to Choose a Super Fund
- Super Contribution Types Explained
- ATO: Super for individuals
- MoneySmart: Getting started with super
This guide provides general information about superannuation in Australia. It does not take into account your personal financial situation, objectives, or needs. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.