Understanding the basics

Whether it’s your own retirement savings, or group super for your employees, it pays to understand the ins-and-out of how superannuation works.

What is superannuation?

For many Australians, super will be their main source of retirement income. They'll accumulate super during their employment throughout their lives, and one day they'll turn this money into a retirement income stream.

But what if you're the one paying the super? As a business owner, your personal super is your own responsibility but it is also up to you to fulfil your super obligations to your employees.

If you'd like to find out more about your own super, click here. Or read on to find out more about what you need to do for your employees.

Do I have to pay super to my employees?

Generally speaking, you have to pay super for your employees if they:

  • are between 18 and 70 years of age
  • are paid $450 (before tax) or more in a calendar month, and
  • work full-time, part-time or on a casual basis.

The minimum amount of super (also known as the 'Superannuation Guarantee') you need to pay is based on 9.5% your employee's 'ordinary time earnings' - or the amount of hours they normally work. These amounts must be paid at least quarterly to avoid penalties.

The super payments you make to your employees are generally tax-deductible in the financial year you pay them. For full details of your super obligations, read the Australian Taxation Office's Guide for employers.

Do I have to pay super to myself?

If you're self-employed, you don't have to pay super to yourself. But you may choose to do so to help build your retirement savings.

You may also be eligible to claim a tax deduction for any contributions you make to super. This can make super an attractive way to save - provided you're prepared to put this money away until retirement.

Can my employees choose their own super fund?

The short answer is yes. Since 1 July 2005, employees, with some exceptions, have been able to choose the super fund their contributions are paid to.

If your employees don't exercise this choice, you must be able to provide them with a 'default' super fund you have chosen. OnePath can help you set up a default fund for your employees - click here for more information.

Do I have to provide life insurance for my employees?

If you contribute to a default super fund for your employees, it is generally required to provide a minimum level of life insurance, depending on your employees' age.

Age of member (years) Minimum level of death cover required













56 +


Group Salary Continuance (or Income Protection) cover is not required to be provided to your employees by law. But can provide a valuable additional benefit for your employees. Group Salary Continuance (or Income Protection) is available inside and outside of super.

How can a financial adviser help me?

A financial adviser can help you ensure your own super is working towards your long-term retirement goals. If you have employees, they can also help you choose a group super and insurance arrangement that suits your circumstances. If you don't have a financial adviser, OnePath can help you find one in your local area.

OnePath is one of the leading providers of financial services in Australia, including investment, insurance and superannuation. Find out more online or speak to a financial adviser. You should not rely on this information and should seek your own advice on your obligations.