Superannuation in Australia: how the system works

The route of one dollar

Most people who work in Australia get super from their employer: the employer pays into a super account, and the fund invests the money over time. From there the dollar meets a rule at each stop. Five stops, five guides.

1. In by law

   1. The super guarantee

      From 1 July 2026, the ATO says, an employer pays the super guarantee for each payday, at 12% of qualifying earnings, and the fund must receive it within 7 business days after payday to be on time, with some exceptions, such as for new employees.

   2. Contribution caps

      The general concessional cap is $32,500 from 1 July 2026, up from $30,000 for 1 July 2024 to 30 June 2026. Going over a cap may mean extra tax.

2. Kept in, and taxed along the way

   1. Tax on super

      Moneysmart says concessional contributions are taxed at 15% going in, and that Division 293 tax adds another 15% where income and concessional contributions together come to more than $250,000, as stated on 8 October 2026. Moving super between complying funds is not taxed until it is withdrawn, the ATO says.

3. Out, when the law says

   1. When super can be accessed

      The ATO says it is illegal to withdraw super without satisfying a condition of release. Turning 65 is one, even for someone still working.

   2. Early release

      To withdraw super on severe financial hardship, someone under preservation age must meet two conditions: they have received eligible government income support payments for 26 weeks in a row, and they cannot meet reasonable and immediate family living expenses. Someone who meets both can withdraw between $1,000 and $10,000, or, if their super balance is under $1,000, up to their remaining balance after tax. Only one withdrawal is allowed in any 12 months.

The rule behind each stage

Each stage is held by a rule with something behind it. Going in, the guarantee is backed by a charge: an employer who does not pay it is liable to the super guarantee charge, the ATO says. Staying in, the preservation rules follow the money even when it moves to another complying fund, so it can be accessed only once a condition of release is met. Coming out early, the grounds are narrow and the conditions strict, and Moneysmart warns that taking super outside the rules can mean extra tax, penalties and lost retirement savings.

The figures on the route, with their dates

Super figures move with the calendar. Each one below carries the date or year its source gives, as checked on 8 October 2026.

What changed on 1 July 2026

Payday Super moved the guarantee from a quarterly rhythm to the pay cycle: before 1 July 2026, an employer only needed to pay super within 28 days of the end of each quarter. Moneysmart describes the change as one of timing rather than of the rules, and notes that the contribution caps still apply. The full before-and-after is in the guide to the super guarantee.

Official sources

The ATO publishes the rates, caps and conditions of release, and its pages are the place to confirm any figure here before relying on it. Moneysmart explains the same system for individuals in plainer language. Each guide names the page to check near its top, and lists its sources at its foot.

Superannuation Australia is a guide published by Dotto, from the sources listed at the foot of each page.