Superannuation for students and under-25s
How super works for casual and part-time workers under 25. The Superannuation Guarantee rate, when employers must pay, and why small contributions early are still worth caring about.
Superannuation is the long-running retirement savings system. Every Australian employer is required to pay a percentage of your ordinary time earnings into a super fund on your behalf. The contribution sits there, mostly inside a tax-advantaged investment account, until you reach preservation age (currently 60) and become eligible to draw on it.
Most school leavers and uni students do not think about super because the balances are tiny. They are right that the absolute numbers are small, but the structural rules still matter.
The Superannuation Guarantee
The Superannuation Guarantee is the legislated minimum contribution rate. As of 1 July 2024 it is 11.5% of ordinary time earnings, scheduled to rise to 12% from 1 July 2025.
Your employer must pay this on top of your wage if:
- You are 18 or over, or
- You are under 18 and you work more than 30 hours in the week.
The previous rule that excluded employees earning under $450 a month was removed in 2022. There is no minimum wage threshold anymore.
Picking a fund
If you do not nominate a fund when you start a job, your employer must pay your super into your "stapled" fund, which is the most recent fund linked to your TFN. If you have never had a super fund, the employer picks their default fund and uses that.
You can change your fund any time. The free YourSuper comparison tool lets you compare MySuper products on fees and returns.
Why small balances still matter
Two things make small balances matter:
- Fees. Many funds charge a fixed weekly admin fee on top of percentage-based fees. On a 1 weekly admin fee is a 10% per year drag. Pick a fund whose admin fees are not actively shrinking the account.
- Insurance. If your balance grows above $6,000 and you turn 25, some funds default to opting you into life and TPD insurance, which the premiums come out of your balance. If you do not need the cover yet, opt out so the premiums do not erode a small balance.
What you should do at 18
- Nominate a low-fee MySuper fund on your first payslip.
- Consolidate any multiple accounts via myGov so you only pay one set of admin fees.
- Check that "first home super saver" (a separate topic in this hub) is something you may want to use.
This is general explanatory information. For advice on choosing a fund see a licensed financial adviser.