Super contributions essentials
Check your employer’s SG contributions
Ensure your employer is paying Superannuation Guarantee (SG) contributions regularly into your super account if you are earning more than $450 a month.
Your employer must be making SG contributions at least quarterly, but some employers can be slow to make their compulsory contributions and some don’t make them at all – particularly if the business is in financial difficulties.
Check with your super fund (or the ATO’s online services through your myGov account) that your contributions are being paid regularly. If not, ask your super fund to follow up with your employer, or consider reporting your employer to the ATO.
If you plan to make extra voluntary contributions before 30 June to claim a tax deduction, ensure all your employer’s contributions (including salary-sacrifice payments) are up to date, so you don’t accidently go over your contribution cap.
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Consider extra contributions
When you start out in your 20s, your budget is usually pretty tight and there are lots of other demands on your salary or wage, but if you can spare a few dollars from your pay packet, it can make a big difference later on.
If you make extra small contributions into your super account now, they will have many years to grow and to benefit from compounding (or earning interest on your interest). This can make things a lot easier when you get to retirement.
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Take advantage of free government money
Depending on your income, you could be eligible for a government co-contribution into your super account of up to $500 a year when you make personal (after-tax) contributions to your super fund.
There is more free money on offer if you are eligible for the Low Income Superannuation Tax Offset (LISTO), which was previously called the Low Income Superannuation Contribution. If you’re eligible and earn up to $37,000, this is a payment of up to $500 from the federal government directly into your super account.
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Check out the First Home Super Savers (FHSS) Scheme
The FHSS Scheme is a government initiative that lets you save for your first home using the super system. With a lower tax rate on the earnings associated with your FHSS savings, for some people it may be a good alternative to keeping your savings in a bank account and it may help you to fast-track your deposit.
There are strict rules governing the FHSS Scheme, so make sure you understand them before signing up. If you are eligible, you will be able to apply for the FHSS Scheme online.
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