What is Superannuation?
Superannuation (also known as super for short) is another name for a pension fund, eg a fund which the employer pays into that you can draw on when you retire. If you have earned in excess of $450 over a continuous rolling 4 week period the employer must pay 9% of your annual gross salary into a superannuation fund on your behalf. If your salary is quoted as a "package" then this 9% would be included in the package. Most employers will quote a salary to which they pay a further 9% into you superannuation fund. For example if you were to be paid $60,000 package, 9% would be paid to your super fund and you would take home $54,000 in you pocket before tax. If the employer quoted a base salary of $60,000 then you would take home $60,000 before tax and the employer would have to pay another 9% into a super fund so your package would be ($65,400).
I dont have a superannuation fund?
No worries, chances are that you have never even thought about your retirement or have a superannuation fund. Your employer will have a fund that they use to pay your super into. You can opt to have it paid into your own choice of fund but unless you are going to be in Australia until you retire it does not really matter. Just remember to keep a note of who the fund is with and your membership number.
Can I claim my superannuation back when I leave?
If you are on a working holiday visa when you depart Australia permanently you can claim a refund. Think of it as a little nest egg so you can have some money when you get back home!! At the airport you will be given a departure card at immigration and on the back there is a section for you to fill out in order to get information on how to claim a refund or use our specialist superannuation refund firm. You can also find information at industry super.
Should I work for cash?
Some employers offer to pay you in cash (without deducting tax) which may seem like a great idea but most will pay you a wage that is well below the minimum award rate of pay for your industry. An example, that is not uncommon, would be working in a cafe where they give you $10 cash plus tips. If you were on the payroll your minimum legal award rate that the employer must pay would be around $16 an hour plus tips and you would receive your 9% super contribution as well! Chances are also that if you have an accident at work you would not be able to claim against your employers liability insurance as you are not registered as an employee. In this case you would be better working for another employer, receiving the minimum award rate of pay and your superannuation as you can claim back your superannuation when you leave Australia. Note it is your responsibility to ensure you have paid the correct rate of tax at the end of the tax year which runs 1st July to 30th June each year.
Find out more about TAX in Australia and Bank Accounts and Tax refunds
Disclaimer: Please note the above information is intended for a guide only. Tax / superannuation information changes regularly and we are not Tax agents so for the most up to date advice please contact the Australian Taxation office.