Superannuation Guarantee (SG)
Superannuation is your hard-earned money, and someday you're going to need it. So it's important to ensure you understand how it works and how you can make the most out of it.
As an eligible employee, super is compulsory and forms part of your overall pay. Your employer must pay a minimum 10% of your ordinary time earnings (OTE) as a contribution to a complying super fund like Club Plus Super. This is called the Superannuation Guarantee (SG).
There are some exceptions to this:
- If you earn less than $450 in a calendar month; or
- If you are aged under 18 and work less than 30 hours/week and earn less than $450; or
- If an employer shortfall exemption certificate has been issued by the Australian Taxation Office (ATO) in relation to that employer for the quarter.
If you think your employer isn’t paying your super contributions correctly, the ATO has a step-by-step guide to help you check your contributions and if necessary report unpaid super.
What makes super so special is the way in which investment returns are taxed. Unlike other comparable investments, which are typically taxed under marginal income tax rates (as high as 45%) the investment returns of your super fund are generally taxed at only 15%.
This low rate of tax means your super can potentially grow in value at a faster rate than other investments invested in the same assets.
When you contribute to super, your money is pooled together with those of other fund members and invested by professional fund managers.
Typically, super funds like Club Plus Super, have a number of different investment options, each with its own investment strategy. Depending on what options you choose, your money can be invested in Australian and international assets including shares, property, fixed interest and cash. They can be invested primarily in a single asset class, say, Australian shares, or they can be invested in a diversified mix of asset classes, for example, the MySuper / balanced
option which contains a range of different asset classes including shares, property and fixed interest.
At Club Plus Super, you can choose your investment option(s). This is an important exercise and you should seek advice if unsure.
For more information about how super works, claiming your benefits and super and tax, refer to the Member Booklet.