{"id":50075,"date":"2022-11-22T11:32:42","date_gmt":"2022-11-22T03:32:42","guid":{"rendered":"https:\/\/www.crazydomains.com\/learn\/?p=50075"},"modified":"2022-11-22T11:32:42","modified_gmt":"2022-11-22T03:32:42","slug":"superannuation-australia","status":"publish","type":"post","link":"https:\/\/www.crazydomains.com.au\/learn\/superannuation-australia\/","title":{"rendered":"What is Superannuation in Australia and How it Works"},"content":{"rendered":"

\u201cSuperannuation\u201d \u2013 from the sound of this word, it seems to be complicated, right? It\u2019s a program in Australia that lets employees create a retirement corpus for themselves \u2013 and every business must comply.<\/span><\/p>\n

Much like in other countries, Australia has several mechanisms to help its retired population keep “earning” after retirement. Personal savings, government contributions, and superannuation help\u00a0retirees maintain their preferred lifestyle in their senior years.<\/span><\/p>\n

In fact, according to the <\/span>Australian Prudential Regulation Authority (APRA),<\/span><\/a> the total assets in superannuation at the end of March 2022 is $3441.5 billion which marked a 9.7% increase from March 2021.<\/span><\/p>\n

The number indicates that people are becoming more aware of superannuation and its benefits, especially post the COVID-19 pandemic.<\/span><\/p>\n

Much like you have a fixed budget for\u00a0<\/span>growing your business<\/span><\/a>, you also need to allocate a budget for your employees\u2019\u00a0superannuation. Let\u2019s talk about superannuation and how it works for your business.<\/span><\/p>\n

READ: <\/span><\/b>What You Need to Know About Starting a Business in Australia<\/span><\/b><\/a>\u00a0<\/span><\/p>\n

What is Superannuation?<\/span><\/b><\/h2>\n

Superannuation, or \u201csuper\u201d for short, is a pension program in Australia. If you\u2019re an employer, you would need to pay a super guarantee to all your employees\u00a0on top of their salary.<\/span><\/p>\n

Employers need to pay super for their employees. As of the 8th of November 2022, the <\/span>super guarantee contribution<\/span><\/a> applicable to employers is 10.5% of an employee’s base salary.<\/span><\/p>\n

A super guarantee is a fixed sum that an employer contributes to an employee\u2019s superannuation. If the employees wish to enhance their retirement corpus, they can make personal contributions.<\/span><\/p>\n

Types and Mechanisms of Superannuation<\/span><\/b>\u00a0<\/span><\/h3>\n

Superannuation isn\u2019t a static process. It\u2019s dispensed to employees in three ways and two mechanisms:<\/span><\/p>\n

Types of Superannuation<\/span><\/b><\/h4>\n