Superannuation Basics

SuperannuationWhether you have just entered the work force or are getting ready to leave it, superannuation is vital to your future. With the abolishment of aged pensions, this amount that is put aside every pay cycle by your employer (typically 9.5%) is your nest egg for retirement – the money you will have to live off. Whilst some people have investments, shares and other sources of income they may be able to cash in, most Australians are keeping things simple and focusing on building their superannuation accounts to provide for them in their golden years.

Integra Business Accountants can assist clients with their personal and staff superannuation contributions, whilst stressing the importance of superannuation to the up and coming workforce to ensure financial stability for the future.

Some basics for the younger employees include:

  • The Definition of Superannuation
  • How To Increase Your Superannuation
  • What You Cant Do With Superannuation

The Definition of Superannuation

Superannuation is money paid into an account for you by your employer. For most workers, the employer pays the money into a designated superannuation account (as decided by you) ON TOP of your wages/salary. Generally, an employer must pay superannuation to workers 18 years or over and paid $450 or more (before tax) in a calendar month, or those under 18 that are paid the same in a month and work more than 30 hours per week. You are eligible for superannuation payments if you are casual, part-time or full time but different rules apply for ABN holders and contractors.

How To Increase Your Superannuation

Voluntary contributions are a fantastic way to ‘grow’ your super and even the smallest amounts can make a difference. You can also be eligible for Australian Government co-contributions (where the government match all or part of what you have paid) on amounts every tax year. There are limits or ‘caps’ as to how much you can contribute without incurring additional tax; make sure you check with your accountant to ensure your combined voluntary and employer contributions aren’t going to land you with a tax bill.

What You Can’t Do With Your Superannuation

Super is enforced savings – the government is MAKING you save so you have something when you retire, therefore you cannot access your superannuation balance before you retire. There are circumstances where people can access part of their superannuation due to extreme financial hardship, however this not only takes a big chunk out of your savings and requires detailed and extensive documentation and paperwork, it can also result in being taxed at a very hefty rate.

Got questions about your Super?

Call Integra Business Accountants today. They can assist with all areas of both business and personal accounting and tax, including superannuation contributions for both employees and employers.

Call into the office at 2/1 Robinson Place, Rockingham or call 9527 3071.

Source: https://www.ato.gov.au/General/superannuation-basics/