Frequently Asked Questions about Superannuation

Ethical investment funds limit themselves to making ‘ethical’ investments (which each fund defines according to its own principles). For example, ethical funds might avoid investing in companies or industries that are linked to human suffering or environmental damage.

As a contractor, you’re entitled to superannuation if:

The contract is mainly for your labour
You’re over 18 and earn more than $450 before tax in a calendar month
You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

Please note that you’re entitled to superannuation even if you have an Australian business number (ABN).

There is an annual limit of $25,000 for concessional contributions – that is, money paid by your employer and extra money you pay into your account through salary sacrificing. There is also a limit on non-concessional contributions. Australians aged between 65 and 74 have a limit of $100,000 per year. Australians aged under 65 have a limit of $300,000 every three years.

As the Australian Taxation Office explains, there are times when superannuation is paid on overtime and times when it isn’t.

Here is the ATO’s summary:

Payment type	Is superannuation paid?
Overtime hours – award stipulates ordinary hours to be worked and employee works additional hours for which they are paid overtime rates	No
Overtime hours – agreement prevails over award	No
Agreement supplanting award removes distinction between ordinary hours and other hours	Yes – all hours worked
No ordinary hours of work stipulated	Yes – all hours worked
Casual employee: shift loadings	Yes
Casual employee: overtime payments	No
Casual employee whose hours are paid at overtime rates due to a ‘bandwidth’ clause	No
Piece-rates – no ordinary hours of work stipulated	Yes
Overtime component of earnings based on hourly-driving-rate method stipulated in award	No

No, your employer can’t touch the money that is paid into your superannuation account.

Reportable employer superannuation contributions are special contributions that an employer makes on top of the regular compulsory contributions. One example would be contributions made as part of a salary sacrifice arrangement.

For employees, there are two types of reportable superannuation contributions:

Reportable employer super contributions your employer makes for you
Personal deductible contributions you make for yourself

Your money will be invested in an investment option of your choosing.

No, self-employed workers don’t have to pay themselves superannuation. However, if you do pay yourself superannuation, you will probably be able to claim a tax deduction.

A superannuation fund is an institution that is legally allowed to hold and invest your superannuation. There are more than 200 different superannuation funds in Australia. They come in five different types:

Retail funds
Industry funds
Public sector funds
Corporate funds
Self-managed super funds

Retail funds are usually run by banks or investment companies.

Industry funds were originally designed for workers from a particular industry, but are now open to anyone.

Public sector funds were originally designed for people working for federal or state government departments. Most are still reserved for government employees.

Corporate funds are arranged by employers for their employees.

Self-managed super funds are private superannuation funds that allow people to directly invest their money.