Superannuation is Australia's compulsory retirement savings system. Instead of relying only on the age pension, employees build a private balance over their working life, invested by a super fund and drawn down in retirement. Here's how the pieces fit together.
Employer Contributions (Super Guarantee)
Your employer must pay at least 12% of your ordinary time earnings into a complying super fund — this is the super guarantee (SG). It's paid on top of your salary, not deducted from it, and applies to most employees aged 18 and over, including many casual and part-time workers. On a $90,000 salary, that's $10,800 a year in employer contributions.
There's a ceiling: employers don't have to pay SG on earnings above the maximum contribution base, $270,830 a year in 2026–27.
Contributions Tax
Super contributions are taxed at 15% inside the fund — usually well below your marginal income tax rate, which is what makes super tax-effective. From the $10,800 example above, about $9,180 actually lands in your account after this tax.
Contribution Caps
Before-tax (concessional) contributions — employer SG, salary sacrifice, and personal contributions you claim a deduction for — are capped at $32,500 a year in 2026–27. Go over the cap and the excess is taxed at your marginal rate on top of the 15% already paid, effectively taxing it twice unless you withdraw the excess.
When Can You Access It?
Super is locked away until you meet a "condition of release". The main one is reaching your preservation age (60, for everyone born after 1 July 1964) and retiring, or turning 65, at which point you get unrestricted access regardless of whether you've retired. Earlier access is only allowed in limited cases, such as permanent incapacity or severe financial hardship.
Growing Your Balance Faster
Beyond the compulsory SG, you can salary sacrifice extra contributions (see our Take Home Pay Calculator Australia to see how that changes your pay), or make personal contributions and claim a tax deduction. Both count towards the concessional cap above. Our Super Calculator Australia lets you project how extra contributions and investment returns could grow your balance by retirement.
Sources: ATO — super for employers; ATO — concessional contributions cap.