How does my super work?

The most common type of super is an accumulation fund, which is like a managed fund or investment. The main difference is the advantageous tax treatment on contributions and earnings which your money enjoys until you retire.If you have a lot of assets and have the time, you may want to consider a self-managed super fund to take control of your super.

Advantages of super

Super opens your money to the world of investment markets and you can choose how it is invested.

Money in super is taxed in different ways to your other investments. It’s designed to reward you for investing for the long term.

Super also offers competitive insurance. Your insurance premiums, which are part of your super contributions, may be paid from your pre-tax salary, which is a tax-effective way to enjoy the protection you and your family need whilst freeing up your cash flow for other purposes.

Making a contribution

Deposits into super are known as ‘contributions’.

There are two types of contributions. They can be made from your:

  • pre-tax income (concessional contributions) made by your employer for example, and
  • post-tax income (non-concessional contributions).

Generally, concessional contributions (made from pre-tax income) attract a contributions tax of 15%, which can be significantly lower than your marginal tax rate. There is no tax on non-concessional contributions as you have already paid income tax personally on these funds.There are caps or limits on how much of both these types of contributions you can make into super each year which vary depending on your age.


  • Investment income and earnings in super are taxed at up to 15% (and only 10% on capital gains), which is lower than most people’s marginal tax rate. If you start a pension at retirement then the tax on earnings in super reduces to nil.
  • If you withdraw after age 60 your money is tax free.

Talk to us about the contributions you should be making, whether you are employed or self employed, working or not.

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