Superannuation for new migrants in Australia: what you need to know from day one

How the super guarantee works

Every employer in Australia is required to pay superannuation guarantee (SG) contributions on behalf of eligible employees. The current SG rate is 11.5% of your ordinary time earnings, and it is scheduled to increase to 12% on 1 July 2025 (ATO). The contribution is paid by the employer on top of your salary — it is not deducted from your pay.

For example, if your annual salary is AUD 80,000, your employer pays an additional AUD 9,200 (11.5%) into your super fund each year. This money is invested by the fund and grows over time through investment returns.

SG applies to most employees aged 18 and over, regardless of visa type. Part-time and casual employees are also covered — the previous AUD 450 monthly earnings threshold was removed in 2022. If you earn any ordinary time earnings, your employer must pay SG.

The SG is a minimum. Some employers offer higher contribution rates as part of their remuneration package — this is more common in public sector and some professional roles. Any additional employer contribution above the SG rate still goes into your super fund.

Choosing a super fund

You have the right to choose which super fund your employer pays contributions into (ATO). If you do not make a choice, your employer will typically pay into a "default" fund — often a large industry or retail fund selected by the employer.

Making an active choice is worthwhile because different funds have different fee structures, investment options, insurance coverage, and performance histories. A fund that charges 0.5% in fees versus one that charges 1.5% makes a significant difference over 20–30 years of compounding.

To choose a fund, you complete a Standard Choice Form (available from the ATO or your employer) with the details of your preferred fund — the fund's name, ABN, USI (Unique Superannuation Identifier), and your member number. Your employer must direct contributions to your chosen fund within two months.

For new migrants who do not yet know which fund to choose, starting with the employer's default fund and switching later is a reasonable approach. You can change funds at any time, and rolling your balance from one fund to another is free.

What to look for in a super fund

Several factors matter when comparing funds.

Fees are the most controllable factor. Super funds charge administration fees (a flat dollar amount per year, typically AUD 50–150), investment fees (a percentage of your balance, typically 0.5–1.5%), and in some cases, activity fees for specific transactions. Lower fees mean more of your money stays invested. The ATO's YourSuper comparison tool allows side-by-side fee comparisons.

Investment options vary between funds. Most funds offer a default "balanced" or "lifecycle" option, along with choices ranging from conservative (more bonds and cash) to aggressive (more shares and property). For younger migrants with decades until retirement, a higher-growth option may suit — but this depends on individual risk tolerance.

Insurance is bundled into most super funds by default. This typically includes life insurance (also called death cover) and total and permanent disability (TPD) insurance. Income protection insurance may also be included. The premiums are deducted from your super balance, reducing your retirement savings. For new migrants, the default insurance may not match your needs — if you have insurance from your home country, or if the default cover is insufficient for your circumstances, review and adjust it.

Performance history, while not a guarantee of future returns, provides context. The ATO publishes comparative performance data for MySuper (default) products, and independent research firms like Rainmaker, Chant West, and SuperRatings publish fund rankings.

Providing your TFN to your super fund

Providing your Tax File Number to your super fund is important. Without it, your fund will apply a higher tax rate to concessional contributions (32% instead of the standard 15%), you cannot make personal contributions and claim a tax deduction, you cannot consolidate multiple super accounts through the ATO's online tools, and your fund may have difficulty locating and merging lost super.

When you join a fund or receive your first contribution, provide your TFN as soon as possible. This can be done through the fund's website, app, or by completing a paper form.

Super and temporary visa holders

Temporary visa holders accumulate super in the same way as permanent residents — the employer's SG obligations are identical. However, temporary visa holders have an additional option: if they leave Australia permanently and their visa expires or is cancelled, they can claim their super through the Departing Australia Superannuation Payment (DASP) process (ATO).

DASP claims are subject to withholding tax. The rates vary depending on whether the super includes taxed or untaxed elements and whether any amount relates to a working holiday maker visa. For standard temporary visa holders, the withholding rate on the taxed element is 35%, and on the untaxed element, 45%. These rates are significantly higher than the 15% contributions tax paid on the way in, which means a substantial portion of the super is lost in tax when claimed through DASP.

Despite the tax hit, DASP returns funds that would otherwise be locked away until Australian retirement age (currently between 55 and 60 depending on birth date). For temporary visa holders who are certain they will not return to Australia, claiming is usually the practical choice.

For a detailed walkthrough of the DASP process, see the guide on claiming super when leaving Australia.

Super and permanent residents

Permanent residents cannot claim their super through DASP. Super is preserved until the member reaches their preservation age and meets a condition of release — typically retirement after reaching age 60.

For permanent residents who arrived as adults, the super accumulated during their working years in Australia forms part of their retirement savings alongside any overseas pension entitlements. If you are a permanent resident from a country with a reciprocal social security agreement (such as the UK, US, or certain EU countries), you may be able to use your overseas contribution periods to meet eligibility requirements for the Australian Age Pension.

Permanent residents who plan to stay in Australia long-term should treat their super fund choice as a serious financial decision — the fund that performs well and charges low fees over 20–30 years will deliver materially better retirement outcomes than one that underperforms or overcharges.

Making additional contributions

Beyond the employer's SG, you can make voluntary contributions to boost your super balance.

Salary sacrifice involves your employer making additional contributions from your pre-tax salary. These contributions are taxed at 15% in the fund, which is lower than most people's marginal tax rate. There is a cap on total concessional (pre-tax) contributions — currently AUD 30,000 per year from all sources (employer SG, salary sacrifice, and personal deductible contributions combined).

After-tax contributions (non-concessional contributions) are made from your take-home pay. These are not taxed on entry to the fund because tax has already been paid. The cap is AUD 120,000 per year, with a three-year bring-forward rule allowing up to AUD 360,000 in a single year under certain conditions.

For new migrants building their first Australian retirement savings, salary sacrifice can be a tax-effective strategy — particularly for those on higher incomes where the difference between the marginal tax rate and the 15% super tax rate is largest.

Keeping track of multiple super accounts

It is common for new migrants to accumulate multiple super accounts — one from their first employer, another from a second job, and possibly a third if they changed jobs again. Each account charges its own fees and deducts its own insurance premiums, eroding the total balance.

Consolidating super accounts into a single fund reduces fees and simplifies management. The ATO's myGov-linked ATO online services let you find and consolidate super accounts. For a full guide, see consolidating super accounts in Australia.

Do I get super if I am on a temporary visa?

Yes. If you are employed and earn ordinary time earnings, your employer must pay SG regardless of your visa type. The only difference is that temporary visa holders can claim the super through DASP when they leave Australia permanently.

Can I choose not to receive super and get higher pay instead?

No. The SG is a legal obligation on the employer and cannot be substituted with additional salary. Employers who fail to pay SG face penalties from the ATO, including the Super Guarantee Charge.

What happens to my super if I die?

Your super is paid to your nominated beneficiaries or, if no valid nomination exists, to your estate or as determined by the fund trustee. Making a binding death benefit nomination when you join a fund ensures your super goes where you intend.

Is super included in the salary figure in my job offer?

This depends on how the offer is structured. Some offers state a "base salary plus super" (meaning super is on top). Others state a "total remuneration package" that includes super. Always clarify whether the stated salary is exclusive or inclusive of super — the difference is 11.5% of your base pay.

When can I access my super in retirement?

Your preservation age depends on your date of birth. For those born after 1 July 1964, the preservation age is 60. You can access your super when you reach preservation age and retire, or when you reach 65 regardless of whether you have retired.