Most working Australians have super, but many aren’t sure how it works. Here’s the system that will pay for most people’s retirement, in plain English.
Superannuation, or super, is Australia’s retirement savings system.
The idea is simple: a portion of what you earn during your working life is put aside, invested, and left to grow so you have money to live on when you stop working. Super has been compulsory for most employees since 1992, and Australia’s super funds together now manage trillions of dollars, making the system one of the largest pools of retirement savings in the world.
Most of the money comes from employers. Under the superannuation guarantee, employers must pay a set percentage of an employee’s ordinary earnings into their super fund, on top of their wages. That rate rose to 12 per cent on 1 July 2025.
Under the Payday Super rules, employers are required to pay super at the same time as wages from 1 July 2026, rather than every three months, so contributions reach people’s accounts sooner and missed payments are easier to spot.
You can also add your own money, either from your pre-tax salary through salary sacrifice or from your take-home pay. Contributions and investment earnings inside super are generally taxed at lower rates than ordinary income, which is part of what makes it an effective way to save, though there are limits on how much can be contributed each year at the lower rates.
Where your money goes, and when you can get it
Your super fund invests your money in a mix of assets, such as Australian and overseas shares, property, infrastructure, bonds and cash. Most people are in their fund’s default option, but you can usually choose a mix that’s more cautious or more growth-focused.
Over the decades a person is working, investment returns can make up a large share of their final balance. That’s why fees and performance matter: a small difference in fees each year can add up to tens of thousands of dollars by retirement. The government’s YourSuper comparison tool lets people compare funds’ fees and returns.
Super is designed to be locked away until retirement. In most cases you can access it once you reach your preservation age, which is 60 for anyone born after 30 June 1964, and retire, or when you turn 65 whether you’ve retired or not. Early access is allowed only in limited cases, such as severe financial hardship or certain medical conditions.
It’s also worth checking you don’t have several super accounts, each charging fees and insurance premiums. Accounts can be found and combined through the ATO’s online services in myGov.
Because everyone’s situation is different, people with questions about their own super should speak to their fund or a licensed financial adviser.
