The superannuation guarantee (SG) is a compulsory employer contribution by each Australian employer to their employees’ superannuation funds in Australian Unions. According to the SG legislation, employers must contribute 9.5% of all their employees’ salaries or wages, or 9.5% of their total annual wages, whichever is greater.
Superannuation is savings for retirement. Australians aged 18-74 can earn a tax-free income of $18,200 a year and pay no tax on superannuation earnings above $37,000. For casual employees, your superannuation contributions are paid by the employee through their pre-tax earnings. In Australia, you must contribute at least 9% of your income to your superannuation, with your employer contributing up to 9.5%.
There are 3 key benefits.
- Superannuation Guarantee. It’s compulsory for most Australians to pay 9.5% of gross salary to super. This is in addition to any compulsory employer contributions.
- Tax-free earnings. Super contributions are taxed at only 15%.
- Tax-free pension. The super contributions made on your behalf are invested in a fund and taxed at 15%. You then receive a regular pension payment from the fund when you retire.
Superannuation is compulsory for employer and employee contributions and is accessed when you retire. It is a long-term investment, which is typically paid through super funds. Superannuation for casual employees is a benefit offered by some employers, often for full-time workers only. So, if you’re a part-time employee, you’re probably unaware this benefit exists. Simply, superannuation is money set aside by your employer, and the government makes employers pay into it by paying a concessional premium. The aim of superannuation is to provide you with a regular income after you retire. Superannuation is a system that provides certain benefits in retirement. The superannuation system is designed to pay for people’s retirement, including their health care and accommodation.