3 types of super contribution

Super is the 2nd largest financial asset after the family home to most of people living in Australia. Think super is the bank where you draw money from to support your lifestyle after you stop working, and how much money you will have in this bank in the future depends on how much money you put in it today plus how it is invested. The good news is you are not the only one who puts money in, your employer and sometimes even government both help. The money being put into your super is called contribution, depending on who makes such contribution, there are 3 types of it.

Employer Contribution. If you are working for someone and earning $450 above per month, your employer has to contribute 9.5% of your pay into your super account, that is called Super Guarantee, simply means guaranteed super.

Self Contribution. If you take your future life quality seriously and wish to get ahead financially you can top up your super by yourself as well. $10 a week over long term will turn out to be a big super surplus thanks to the magic of compound investment return. Even better, the money put into your super by yourself generally can deduct your income tax now. Basically, government is so happy to see you take more responsibility and initiative for your own financial future instead of relying on them one day, they are willing to incentivise you by doing it. You can even contribute super for your spouse if he or she earns less than $37,000 a year.

Government  Contribution. If you are unable to work full time or earn less than $52,697, government would put some money into your super if you are still willing to save into your super. It can maximum match 50% of how much you put in, that is 50% instant investment return.  As you can see, Australian government has taken a lot of efforts to encourage us to save for our own future retirement.

Who is making the contributions to your super?