Superannuation or Super Tax is an important element of the Australian income tax!
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 1 2017, then your superannuation refund will be taxed at a rate of 38%.
These changes ONLY affect those on a working holiday visas, eg. 417 or 462. If you're on any other visa this will not affect your payment and your super refund will be taxed at 38%.
So..what is superannuation?
In a nutshell, superannuation is a percentage of your salary that's put towards a retirement fund.
It's not deducted from your earnings, but is subsidised by your employer and collected as part of your income tax each month. Obviously if you're not staying in Australia, you're not going to need provisions for retirement there, so you'll be able to claim that back as a nice lump sum once you're done.
Here's a few common misconceptions about super tax from people who've worked or are currently working in Australia.
Myth 1: "I've left Australia already so I can't claim a rebate!"
Actually, you're only eligible to claim your super back once your visa's expired and you've left Australia. Also, you are obliged to file a return for the tax year that you were working in the country even if you were taxed as a non-resident and have already gone home, so you might as well see what the situation on your super is while you do that.
If you haven't left Australia yet but are going to do so in the near future, you might also be able to submit your tax return early and save you the hassle of doing it from abroad.
It’s important to be aware that when you do claim your rebate, 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%.
Yes, paying tax on your refund is a pain but you'll still get a substantial amount-maybe even enough for another holiday!
Myth 2: "I worked in Australia years ago and never claimed my super back when my visa expired...surely it's not still valid?"
Guess again! If you were a foreign resident working in Australia as far back as 1994, you are still eligible to collect any super allowance lodged in your name. That's the past twenty years! However, if you were born an Australian citizen and you've permanently relocated, you'll have to wait until you reach preservation (retirement) age as you're still eligible to retire in Australia.
You'll still be able to access that money if you don't, but not until you're at least 55. If you had plans to spend that refund on a lad's trip to Magaluf, it may have to wait a few years...
Myth 3: "So I can only claim my super once my visa's expired...Does this mean I can't come back to Australia once I've done it?"
Of course not! You can still return to Australia on another visa. However, it's worth bearing in mind that you should only really claim your super if you've permanently left Australia - so you can still go back for holidays, but don't really intend to work or live there again.
Trying to claim super more than once or get permanent work in Australia after you've claimed might have a negative impact on your visa applications, so just be objective.
The average superannuation refund is $1908
Myth 4: "It doesn't say anything on my payslip about super...I don't think I received any..."
As of the 2012 Tax and Superannuation Laws Amendment, it's mandatory for any pay slips issued by employers to state:
- the amount of superannuation contributions per employee
- the date they will be paid, and
- the details of the fund they will be paid into.
However, if you have any payslips dated before 2009, there is a chance that some of these details may not be explicitly stated.
Regardless of whether all details of your super are included on your payslip, you will have a superannuation allowance that you are eligible to claim back on if you were a foreign resident working in Australia over the past twenty years. It might be difficult to track down exactly how much you could be owed if some details are missing or you can't find a payslip, but if you fill out one of our Super mini-packs and send it over to email@example.com, we'll see what we can do for you. It's free, and if you're struggling to find all the details of your super, we might be able to help.
Myth 5: "I had a number of jobs during my time in Australia; I don't think I'm eligible."
Superannuation is a mandatory, government-implemented scheme regardless of the job you do or your residency status. If you're paying tax, you're eligible for superannuation. There are a number of providers that deal with super tax in Australia, and different businesses use different providers, so you might be dealing with a few different companies if you do decide to claim any superannuation.
Don't worry, though – hunting down your various super entitlements and combining them into one neat package some is something we at Taxback.com have years of experience in, so get in touch and we'll see what we can do for you.