What is superannuation?¶

Superannuation — usually shortened to super — is money set aside during your working life so you have an income to live on in retirement. Think of it as a savings pot for your future self, built up a little at a time over many years.

What makes super different from an ordinary savings account is that most of the money comes from your employer, it is invested so it can grow, and you generally cannot touch it until you retire or reach a set age.

In one line

Super is money set aside now — mostly by your employer — and invested so you have an income to live on when you retire.

Why this matters¶

Super is likely to be one of the biggest amounts of money you ever build up. The government's Moneysmart website describes it as savings for your retirement. Knowing what it is, and how it grows quietly in the background, helps you make the most of it.

What you will learn¶

What superannuation is and what it is for
How money gets into a super account
When you can generally access your super

Understanding the concept¶

Moneysmart describes a super account as being a bit like a bank account, but for your retirement savings. While you are working, money is paid in. Over time that money builds up so that later, in retirement, you can draw an income from it.

Most of the money comes from your employer. The ATO explains that if you are eligible, your employer must pay a percentage of your earnings into a super fund for you. This employer payment is called the super guarantee.

The money is not left sitting still. Your super fund invests it on your behalf, which — over many years — helps it grow. Moneysmart explains that your balance builds up from the contributions paid in, plus the earnings from those investments, less any fees.

There is one important catch. Because super is meant for retirement, you generally cannot access it whenever you like. Moneysmart explains that, in most cases, you can start to access your super once you reach a set age and retire from work. Until then, it stays locked away and working for you.

For accountants & bookkeepers

The amount an employer must contribute is set as a percentage of an employee's ordinary time earnings. The ATO refers to the point at which benefits can be accessed as the preservation age, and to the conditions that unlock access as conditions of release. These lessons keep to the plain-language layer — the exact rates, ages and rules are covered in later fundamentals lessons.

Example¶

Aisha starts her first job. Each time she is paid, her employer works out her wage and also sets aside an extra amount of super on top. That super does not go into Aisha's bank account — it goes into her super fund, where it is invested. Aisha is in her twenties, so retirement feels a long way off. But because the money is paid in every pay and then invested year after year, by the time she retires it will have grown into a sum far larger than the contributions alone.

Common misunderstandings¶

Thinking super is taken out of your take-home pay — the super guarantee is paid by your employer on top of your wage, not deducted from it.
Believing super is just savings sitting in an account — it is invested by your fund so it can grow over time.
Expecting to withdraw super whenever you want — it is generally locked away until you retire or reach a set age.

How this works in myaccountant¶

In the app — if you are an employer, myaccountant works out the super owed on each pay, shows you when it is due, and pays it to each employee's fund for you. If you are an employee, the super set aside on each pay appears on your payslip in the employee portal, so you can see it building up. myaccountant is not a super fund, so it does not invest your super — your chosen fund does that.

Key points¶

Super is money set aside during your working life for your retirement.
Most of it comes from your employer through the super guarantee.
Your super fund invests the money so it can grow over time.
You generally cannot access super until you retire or reach a set age.
Super is likely to be one of the largest amounts you ever build up.

Learn next¶

General information only — not tax, super or financial advice.

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