Superannuation

Last updated April 2026

What is superannuation?

Superannuation (often called ‘super’) is money that is paid to you throughout your working life, but it’s set aside in a separate account for you to access when you retire. 

Union members won super as a right for all Australian workers in 1992 – and we’ve been defending and strengthening it ever since.

Super is the main way most people save for their retirement. When you’re younger, it might be easy to think that putting aside money to live off in many decades’ time is not that interesting or important.

But it is crucial that at every stage of your working life, you’re making sure that your super is on track for you to have a secure and rewarding life after retirement – you deserve it!

How is super earned?

Legally, employers must pay the minimum rate of contribution (called the ‘super guarantee (SG) contribution’) into their employees’ super accounts.

Remember, your super is in addition to the wages or salary that get paid directly to you.

You can also make voluntary contributions to your super account. This may be through ‘salary sacrifice’ (where you agree with your employer to reduce your pre-tax income and divert that money to your super account instead), or you can make contributions to your super account directly.

Who is eligible for super?

Generally, most workers are eligible for the SG contribution.

It doesn’t matter if you’re full time, part time or casual – except that if you’re under 18 years old, you’re only eligible if you work more than 30 hours in a week.

How much super does my employer have to pay?

Employers must pay the minimum compulsory amount (the SG contribution). Employers can choose to pay more than the minimum.

The SG contribution is calculated as a percentage of your ordinary time earnings (your base wages or salary, plus allowances, penalties, bonuses and leave payments; but excluding overtime).

As of 1 July 2025, the super guarantee contribution is 12%.

How does super grow over time?

The account that your super is paid into is usually managed by a superannuation fund.

Part of what they do is invest your money, so that over your working life, your balance grows to be more than just the total of the contributions into it. You can choose how your super is invested.

There are many super funds in Australia, most of which fall into two broad categories: for-profit funds and profit-to-member funds (for example, Industry Funds).

Which fund you have your super account with is entirely your choice – but it’s worth knowing that Industry Funds were set up by unions, and have higher investment returns and lower fees, than for-profit funds.

How is super taxed?

There is a concessional tax rate of 15% on contributions to your super account from your before-tax income (i.e. the compulsory contributions from your employer, and any before-tax voluntary contributions you make).

This is up to a limit, which is $30,000 for the 2025-26 financial year.

This tax rate is considered “concessional” because it is generally lower than the marginal tax rate most workers pay on their income that is earned as salary or wages.

When did super begin in Australia?

There were union campaigns for retirement schemes as far back as the 1920s – but it was the 1960s when superannuation began to emerge as a major industrial issue and the 1980s when super started to be included in some awards.

The culmination towards universal super peaked in 1992 when unions won the Superannuation Guarentee Legislation.

This established that employers must make a minimum rate of contribution (called the ‘super guarentee (SG) contribution’) to their employee’s super accounts.

At the time it was 3% of workers’ earnings, which grew to 9% by 2002. After years of further campaigning by unions, the SG contribution grew again between 2013 and 2025 to 12%.

While the tireless efforts of union members over the decades have led to Australia’s super system being one of the best in the world, there is still work to do.

Australia has a significant gender gap in workers’ superannuation savings, with women retiring with an average of 25% less superannuation than men. And stolen super is costing millions of Australian workers over $5 billion a year, disproportionately impacting young workers, women, mgrant workers and those in insecure work. 

Superannuation is a union legacy, and union members won’t stop working to improve our super system until every worker is earning what they deserve and are entitled to. 

Four recent wins that make super even better

Pay day super

Currently, your employer only has to pay the super that you’ve earned into your super account every quarter. That makes it harder for you to keep track of whether you have been paid the correct amount and easier for dodgy employers to steal your super. 

But in late 2025, after years of union campaigning, a new law passed that means super must be paid on the same day as wages.

For most workers, this will mean receiving super either weekly, fortnightly or monthly (it must reach your super account within 7 business days of your pay day).

This is a huge win for workers that will make it much easier to detect unpaid super – plus, it means a bigger balance is compounding; boosting your long-term retirement savings! 

The new law will come into effect on 1 July 2026, so make sure you are checking your super account after this date to make sure you’re receving your super in line with your pay days. 

Super on Paid Parental Leave

As of 1 July 2025, the Federal Government pays 12% superannuation on Commonwealth Paid Parental Leave (PPL) payments. 

Unions have long campaigned for this reform to address the significant gender gap in super savings (one of the main drivers of this inequity is time taken out of the workforce to care for children, which disproportionately impacts women). 

Currently, the law does not require employers to make super contributions on PPL or during a period of unpaid leave. However, enterprise agreements, workplace policies or employment contracts may provide this entitlement.

The right to super

Workers have a stronger enforceable right to super, and stronger grounds to stand up to super-theft, since the National Employment Standards (NES) includes the right to superannuation contributions (as of January 2024).

The entitlement to super in the NES aligns with, and refers to, the legislation won by union members over 30 years ago, and means that most workers covered by the NES can take court action to recover unpaid or underpaid super.

Super boost for low-paid workers

A change to the law from next year is a big win for workers!

The Low Income Superannuation Tax Offset (LISTO) is a government payment into super, designed to boost the retirement balances of low-income workers, by ensuring that less tax is paid on their super than their wages.

But unions have been pushing for years that it has not kept up with the tax system.

In early 2026, the Federal Government legislated that from 1 July 2027:

• the LISTO eligibility annual income cut-off threshold will increase to $45,000 (aligning with the second-lowest tax bracket), and
• the maximum LISTO payment will increase to $810

By lifting the LISTO, low-paid workers will now retire with thousands of dollars more in super and will no longer pay more tax on their super than they do on their wages. 

The LISTO reforms, alongside other new laws to rein in excessive tax concessions for those with the highest super balances, restores fairness to a system that should exist to deliver retirement security for all Australians.

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