How super works

Super is a long-term savings system with its own tax rules, designed to fund your retirement. Money goes in during your working life, is invested by your fund, and is generally locked away until you meet a condition of release.

• Super guarantee (SG): your employer must contribute 12% of your qualifying earnings. The same rate applies in 2025–26 and 2026–27.
• Payday Super: from 1 July 2026, employers must pay SG for each payday rather than quarterly, so contributions should reach your fund much sooner. It’s worth checking your fund statements to make sure they’re arriving.
• Tax inside super: contributions and earnings are generally taxed at concessional rates while you’re building your balance, and investment earnings on money supporting a retirement income stream are generally tax-free.

If you serve or have served in the ADF, your super may sit in a military scheme – ADF Super, MSBS or DFRDB – which has its own rules. See our military superannuation guide for how those schemes work.

Concessional and non-concessional contributions

Contributions fall into two main groups, each with its own annual cap.

• Concessional contributions are generally taxed at 15% in the fund. If your income plus concessional contributions exceeds $250,000, an extra 15% (Division 293 tax) generally applies to some or all of those contributions.
• Bring-forward: if you’re under 75, you may be able to bring forward up to three years of non-concessional contributions – up to $390,000 in 2026–27 if your total super balance was under $1.84 million on the previous 30 June. Lower limits apply at higher balances, and your non-concessional cap is nil once your balance reaches the general transfer balance cap ($2.1 million for 2026–27).
• Carry-forward: if your total super balance was under $500,000 on the previous 30 June, you may be able to use unused concessional cap amounts from up to five previous years – handy after a career break or a year of big deductions.

Helping a partner and government top-ups

• Spouse contributions: if you contribute to your spouse’s super and their income is under $40,000, you may be eligible for a tax offset of up to $540. The full offset applies when their income is $37,000 or less, reducing to nil at $40,000.
• Contribution splitting: you can generally ask your fund to split some of the previous year’s concessional contributions (usually up to 85%) to your spouse’s account. It doesn’t change the tax you pay now, but it can help balance super between partners.
• Government co-contribution: if you make personal after-tax contributions and your income is below the lower threshold of $49,293 in 2026–27, the government may add up to $500. The amount phases out, reaching nil at $64,293. Other conditions apply, including earning at least 10% of your income from work or a business.
• Low income super tax offset (LISTO): if your adjusted taxable income is up to $37,000, you may receive up to $500 back into super to offset the tax on your concessional contributions.

Consolidating funds and insurance in super

Multiple accounts can mean paying several sets of fees. You can find all your super, including any lost or unclaimed amounts, through myGov linked to the ATO, and combining accounts can make life simpler.

Before you roll anything over, check what you might give up:

• Insurance: many funds provide life, total and permanent disability (TPD) and income protection cover. Closing an account usually ends that cover, and you may not be able to get it again on the same terms – particularly if your health has changed or you have service-related conditions.
• Defined benefits: military and other defined benefit entitlements often can’t be moved in the same way as an ordinary account, and moving them where possible may mean giving up valuable features.
• Exit costs and tax: check for any costs of leaving, and how your investments will be sold and reinvested.

Getting your super out

Super is generally preserved until you meet a condition of release. For anyone born on or after 1 July 1964, the preservation age is 60. The main ways to access it are:

• Retiring after reaching preservation age.
• Leaving a job at or after age 60 – even if you keep working elsewhere.
• Turning 65 – there are no cashing restrictions from this age, whether or not you’re still working.
• Transition to retirement – from preservation age you can start an income stream while still working, but withdrawals are limited to 10% of the balance each year.

Limited early access is available in special circumstances, such as severe financial hardship, compassionate grounds, terminal medical conditions or permanent incapacity. Our retirement planning guide covers turning super into an income.

Large balances – the new tax from 1 July 2026

Legislation now in place applies an additional tax on earnings for people with very large super balances, from 1 July 2026:

• an extra 15% on the share of earnings attributable to a total super balance above $3 million
• a further 10% on the share attributable to a balance above $10 million.

The ATO expects to issue the first assessments during 2027–28. Most people won’t be affected, but if your balance – including any SMSF – is approaching these levels, it’s worth understanding how the rules apply to you.

Self-managed super funds (SMSFs)

An SMSF is a private super fund with up to six members, who are generally all trustees (or directors of a corporate trustee). You make the investment decisions – and you carry the legal responsibility.

What people like about them:

• control over investments, including direct shares, term deposits and property (within strict rules)
• flexibility in tax and estate planning, and the ability to pool super with family members
• visibility over exactly what you own.

What you take on:

• Trustee duties: meeting the sole purpose test, keeping fund assets separate from your own, preparing and reviewing an investment strategy, and following strict rules on related parties and borrowing.
• Costs: accounting, an annual independent audit, the ATO supervisory levy, investment costs and possibly advice. Because many costs are fixed, they can weigh heavily on smaller balances.
• Time and skill: record keeping, lodging an annual return, and keeping on top of changing rules.
• Protections: SMSF members don’t have access to the same compensation arrangements or complaints body as members of APRA-regulated funds if something goes wrong through theft or fraud.
• Insurance: you’ll need to arrange any cover yourself.

An SMSF may suit people with a meaningful balance, the time and interest to be involved, and a clear reason that a large fund can’t meet. It’s rarely a good fit simply because it sounds more in control.

Things to weigh up

• Cash flow now versus later: money in super is generally locked away until at least 60. Make sure you keep enough outside super for goals before then.
• Your total super balance: it affects your non-concessional cap, bring-forward, carry-forward and several government top-ups.
• Timing: contributions count when your fund receives them, not when you send them – leave a buffer before 30 June.
• Your service history: military schemes, DVA compensation and any invalidity pension can change the picture, so look at everything together.
• Your partner: spouse contributions and splitting can make a household’s super work harder than two separate accounts.

Common mistakes to avoid

• Exceeding a cap – especially when salary sacrifice, employer SG and a personal deductible contribution all land in the same year.
• Forgetting the notice of intent – to claim a deduction for a personal contribution, you generally need to lodge a valid notice with your fund and receive an acknowledgement before you lodge your tax return, withdraw or roll over.
• Consolidating without checking insurance – and losing cover you can’t replace.
• Starting an SMSF for the wrong reasons – or without factoring in the ongoing cost and responsibility.
• Not updating beneficiary nominations – after marriage, separation or the birth of a child.
• Assuming military super works like an ordinary fund – MSBS, DFRDB and ADF Super each have their own rules.