Superannuation in Australia

Superannuation in Australia, or "super", is a savings system for workplace pensions in retirement. It involves money earned by an employee being placed into an investment fund to be made legally available to members upon retirement. Employers make compulsory payments to these funds at a proportion of their employee's wages. Currently set at 11.5%, from 1 July 2025, the mandatory minimum "guarantee" contribution is 12%.^[1] The superannuation guarantee was introduced by the Hawke government to promote self-funded retirement savings, reducing reliance on a publicly funded pension system.^[2] Legislation to support the introduction of the superannuation guarantee was passed by the Keating Government in 1992.^[2]

Contributions to superannuation accounts are subject to a concessional income tax rate of 15%. This means that for most Australians, the tax on their earned income sent to a superannuation account is less than the income tax on earned income sent to their bank account. Australians can contribute additional superannuation beyond the 11.5% minimum, subject to limits. The maximum amount that may be contributed per year is $30,000.^[3] Contributions higher than this are taxed at the person's ordinary marginal tax rate, meaning there is no tax benefit for contributing beyond that amount.^[4] Ultimately, superannuation is a system of mandatory saving coupled with tax concessions.

As of 31 December 2024^[update], Australians have AU$4.2 trillion invested as superannuation assets, making Australia as a nation the 5th largest holder of pension fund assets in the world.^[5] The vast majority of this money is in defined contribution funds.