Superannuation FAQ

Both newcomers to Oz and people that have been living here a while ask us questions about super funds so we decided to create a handy FAQ document to address the most common questions.

Every day here at the Taxback.com Sydney Office, we assist lots of clients with queries about superannuation ranging from explaining what it is, to letting people know how they can claim it back when they’re leaving. 

UPDATE: If your Departing Australia Superannuation Payment is processed on or after 1 July 2017, your superannuation refund will be taxed at a rate of 65%.

If your superannuation refund is processed before 1 July 2017, then your superannuation refund will be taxed at a rate of 38%.

This change only applies to working holidaymakers on 417 and 462 visas. If you are on any other visa, the change doesn't affect you and your super refund will still be taxed at 38%.

What is superannuation?

Superannuation or super for short is Australia’s pension system which sees funds being put away for when people reach retirement. It is a legal requirement for employers to make minimum provisions for each employee into a nominated superannuation fund.    

Who is entitled to superannuation?

Everyone. Anyone employed in Australia regardless of whether they are a citizen or a visa holder such as a working holidaymaker or student is entitled to superannuation once they are earning in excess of $450 per month. 

What rate is superannuation paid at?

The current super rate of superannuation payments is 9.5% but this is due to be increased to 12% incrementally over the coming years.

Super payments are typically paid on top of your rate of pay so, for example, if you are on a salary of $40,000 per annum your employer will pay $3,800 in super payments to your nominated account.

How can I set up a superannuation account?

There are thousands of superannuation funds in Australia but the easiest way to get a fund set up nowadays is typically via your bank. All the main banks in Australia run their own superannuation funds and you can very easily set one up at the same time as opening your bank account.

Le remboursement moyen de superannuation est de $1908

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When is my superannuation fund paid out?

Given that superannuation is a pension system typically these funds are paid to the beneficiary upon retirement. In the case of a temporary visa holder, however, these funds can be claimed earlier on the basis that they are departing Australia and their visa has expired.

In that case, they can apply for 62% of the value of your super account to be released early. However, it should be noted that the remaining 38% is deducted in tax as a penalty for early release.

In the case of the example above if you are on $40,000 a year and your employer pays AU$1,908 to your super fund and then you leave Australia, the super refund you would be due s is approximately $2,350. 

What's the most common mistake people make with their superannuation?

Many Australians and international workers don’t fully understand super funds and as result when they move from job to job they choose to let their employers put their super payments into the employer’s nominated fund

This results in people having funds in multiple superannuation funds which can lead to them incurring more costs as you have to pay management fees for each fund so it is always best to maintain one fund.

Will I pay tax on my superannuation refund?

It’s important to note that if you are a working holidaymaker on either a 417 or 462 visa, and your Departing Australia Superannuation Payment is processed on or after 1 July 2017, your superannuation refund will be taxed at a rate of 65%. And, if your superannuation refund is processed before 1 July 2017, then your superannuation refund will be taxed at a rate of 38%.

If you are on any other visa, your super refund will still be taxed at 38%.

This articles includes the main questions around this topic but if you have a query that is not addressed here then please feel free to ask it on Live Chat or email australia@taxback.com.

If you are reading this and you are leaving Australia soon or have left already then we recommend that you get in touch with us and we can advise on what you need to do to get your super refund underway.

We can also provide you with an estimation of what you would be due – register here for a call back and a member of our superannuation refund team will be in touch very soon.

The average super refund for Taxback.com customers is AU$1,908 so don’t delay getting in touch.