This week, I met with a client – a single mum and new resident to Australia – who’s hoping to buy her first home. In our chat about her goals and finances, the topic of superannuation came up.

She wasn’t sure how much super she had, how it worked, or whether she could withdraw it.

This is really common. If you’re new to Australia, superannuation can feel confusing – but it’s an important part of your financial future here. Even if your super balance is small now, over time it will grow and could become one of your most valuable assets.

In this post, I will break down the basics to help migrants and new residents understand the system.

What is superannuation?

Superannuation (or “super”) is Australia’s retirement savings system. Your employer must pay a percentage of your wages into a super fund account for you.

• If you choose a fund, contributions go there.
• If you don’t, your employer will use their default fund.

Who pays into your super?

• Your employer – By law, most employers must contribute 12% of your wages (from July 2024). This is called the Superannuation Guarantee (SG).
• You can also add extra money to your super fund to boost your retirement savings. This can be tax-effective because pre-tax (concessional) contribution are tax deductible and can reduce your taxable income. Inside your super, this money is taxed at just 15%, which is usually lower than your marginal tax rate.
• Government: If you’re on a low or middle income, the government may contribute up to $500 a year as a co-contribution when you make personal (after-tax) contributions.
• Your spouse can also contribute to your super. They may even receive a tax offset for helping you build your retirement savings.

What fees will I pay?

Most super funds charge:

• Admin fee – Running the fund (flat fee or % of balance).
• Investment fee – Managing your investments.
• Insurance premiums – If your fund includes life, TPD, or income protection cover.
• Indirect costs – Small costs from the fund’s investments.

These fees come out of your super balance – you won’t get a bill, but they reduce your savings over time.

When can I access my super?

Usually when you retire and reach your preservation age (between 55–60 depending on birth year) or when you turn 65 (even if you’re still working).

Earlier access is only allowed in limited cases, like:

• Serious illness or permanent disability
• Severe financial hardship (strict criteria)
• Leaving Australia permanently on a temporary visa (via DASP – Departing Australia Superannuation Payment)

How is my super money used?

• Your fund invests your money – in shares, property, bonds, and other assets so it grows.
• Fees and insurance costs are deducted – these come out of your balance automatically.
• Tax is also deducted – contributions and investment earnings are generally taxed at 15% inside your super fund
• Earnings (profits, dividends, interest) are reinvested – helping your balance grow through compounding over time.

Can I set up my own super fund?

Yes – it’s called a Self-Managed Super Fund (SMSF).

• Pros: Full control, flexible investment options (even property), potential cost savings for large balances, estate planning benefits.
• Cons: Big responsibilities, higher costs (setup, audits, ATO fees), lots of admin, and harsh penalties for mistakes. An SMSF isn’t for everyone – it suits experienced investors with larger balances (often $500k+).

How is super taxed?

• Pre-tax contributions (such as employer payments or salary sacrifice) are taxed at 15% when they go into your fund. If you go over the concessional cap (currently $30,000 p.a), and the excess is added to your income and taxed at your marginal rate (with a 15% offset).
• After-tax contributions aren’t taxed again in your fund.
• Investment earnings while you’re working are taxed at 15% (or 10% for capital gains on assets held over 12 months).
• Once you start a retirement income stream, earnings – including capital gains – are tax-free.
• When you reach your preservation age, you can start accessing your super. If you’re 60 or over and draw your super as a pension (regular income), it’s tax-free. If you’re under 60, a portion of your super will be taxed at your marginal tax rate. A 15% tax offset will generally be available to lower any tax that may be payable.
• If you take your super as a lump sum after age 60, it’s generally tax-free.
• If you pass away, your super goes to your beneficiaries. The tax depends on who receives it, how it’s paid (lump sum or income), and how much of your super is taxable or tax-free.
  
  I made this video that walks through super tax at every stage – worth checking out!

How to choose a super fund

• Check the performance – Look at how the fund has performed over the long term (5–10 years).
• Compare fees – Lower fees mean more of your money stays invested.
• Understand investment options – Does the fund offer choices like conservative, balanced, or growth?
• Review insurance cover – Many funds include life, TPD, or income protection by default.
• Look at extras – Some funds offer education tools, advice, or member benefits.
• Consider your situation – Your age, risk comfort, and future plans all matter.

Tip: A licensed financial adviser or planner can help you choose the right fund for your needs and goals.

Does your super balance affect borrowing power?

Your super balance itself doesn’t directly affect your borrowing power, but it can have indirect impacts when you apply for a loan.

Super isn’t counted as income – Banks don’t consider your super balance when calculating how much you can borrow. However, if you’re retired or near retirement, lenders may consider how your super could provide income (through a pension) to repay a loan.

Using super for retirement shows financial stability – A healthy super balance might give lenders confidence in your overall financial position, but it won’t boost the loan amount you can borrow.

How to check your super balance

• Log in to your super fund’s online portal or app – Most funds let you see your balance, contributions, and fees.
• Check your myGov account – Link the ATO service in myGov. It will show all your super accounts and their balances in one place.
• Read your super statements – Funds must send you a statement at least once a year (often twice).

How to Check if Your Employer Has Paid the Right Amount?

• Look at your payslip (should show super amount – currently 12%).
• Check your super account – Log in to see if those payments actually arrived (employers must pay at least quarterly).
• If payments seem missing, first, ask your employer/payroll team – sometimes payments are delayed but still within the legal time frame.
• If payments are missing or late, you can contact the ATO (they can follow up with your employer).

Final Word

For migrants and new residents, superannuation might not be top of mind when you first move to Australia – but it’s an important part of building a secure financial future here.

Start by finding out where your super is, checking your balance, how your fund is performing, and whether your employer is contributing the correct amount. If you’re unsure which fund or strategy is right for you, it’s recommended to speak with a qualified financial adviser for guidance.