Backpacker’s Guide To Superannuation In Australia

Lily Kerley

February 21st, 2024

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6 minute read

While retirement is probably not the first thing on your mind when you score your first backpacker job in Australia, it is a big part of the employment process down under. While it may seem daunting, don’t worry… it’s actually quite simple! From explaining the basics of superannuation to letting you in on the best funds for backpackers, our experts will outline your rights to superannuation in Australia, link you to official resources and help you to understand what this whole “super” thing is about!

• What is superannuation?
• Does everyone receive superannuation?
• How much super should I receive?
• Do I need an Australian superannuation fund?
• Can I withdraw the money in my super fund when I leave Australia?
• What is the best superannuation fund for backpackers?
• Is it difficult to set up a superannuation fund in Australia?

What is superannuation? 

Also referred to as 401k, a pension fund or the quintessentially Aussie “super,” superannuation is money that your employer must pay towards your retirement. Your superannuation is money that is paid by your employer on top of your pay cheque. This money is generally managed in a fund, selected either by you or your employer, in which it is invested and held until retirement.

Always remember that it is a legal obligation for employers to pay super to a selected fund for full-time, part-time and casual employees. It’s never a “nice” thing or a favour… it’s actually illegal for your employer not to pay super as an eligible worker.

Does everyone receive superannuation? 

Most working people in Australia must receive superannuation from their employers, no matter what they are paid or how many hours they work. Most backpackers on a Working Holiday Visa completing their required hours, or working in a casual, part-time or full-time position should be receiving superannuation.

There are a few niche cases of workers who aren’t eligible to receive superannuation. For example, some contractors do not receive superannuation, under 18-year-olds who work less than 30 hours a week, and domestic/private employees such as nannies and housekeepers who work less than 30 hours a week are not entitled to superannuation. If you’re unsure whether or not you should be receiving superannuation, check out this official quiz tool from the Australian Tax Office.

How much super should I receive?

Currently, eligible employees should receive a super guarantee of at least 10.5%. This means that all employees must receive a minimum payment of 10.5% of their earnings (not including overtime) on top of their wages, into a dedicated super fund. This percentage increases annually, so check out the most recent super guarantee rates on the ATO webpage.

While it is rare, some employers may choose to pay more than the minimum superannuation guarantee rate, usually as an incentive to attract workers. Superannuation is required to be paid regularly, at a minimum of quarterly payments each year.

Unless you regularly check your selected superannuation account, you won’t usually be notified of any payments, or lack thereof, coming into your super account. Remember to check your super activity, as at the end of the day, it really just means more money for you! Remembering your super is also important when you're leaving Australia, as otherwise, it will just be money lost for you.

Do I need an Australian superannuation fund?

In short, yes, you do need to select and set up an Australian superannuation account while you are working and earning in Australia. While it is possible to set up and maintain a Self-managed Super Fund (SMSF), it is expensive, laborious, complicated and nonsensical for most Australians, let alone backpackers, as your time in Australia is either limited or undetermined.

Can I withdraw the money from my super fund when I leave Australia?

Yes, when you return home with no intention of coming back to Australia in the near future, as a Working Holiday Maker you can close your super fund and withdraw the money that is in there. This withdrawal payment is called a Departing Australia Superannuation Payment (DASP). All that is required for you to receive this payment is to close your account, fill out a form and provide evidence of your departure (plane tickets will usually suffice). 

Unfortunately, all DASPs are subject to a DASP tax rate, which is currently at 65% of your total untaxable superannuation earnings. Interestingly, Australians can't withdraw their superannuation fund until retirement, so take advantage of this and get your cash moneys! 

What is the best superannuation fund for backpackers?

There is a large selection of superannuation funds in Australia, all with different pros and cons. If you don’t want to go to the hassle of choosing, sometimes your employer will have a default fund they go with if their employee has no preference. However, if they don’t, or you would prefer to choose, you must consider what you value when looking for a superfund.

If you’re looking for an ethical choice that doesn’t invest your money into coal, oil and inequality-promoting projects, Australian Ethical Super is your go-to. However, a lot of backpackers just want low fees and decent performance, which both AustralianSuper and UniSuper offer.

Is it hard to set up a superannuation fund in Australia?

No, it isn’t hard to set up a superannuation fund at all! All you need is a computer, a Tax File Number (TFN) and identification and you can do it all online. Setting up a TFN is free, so if you're paying for a service here, just double-check to make sure you're not getting scammed. Once signed up for your selected fund, you will receive all of the information required by your employer, and once the paperwork is completed, you should automatically receive your super payments into your chosen fund!

For more tips, tricks and explainers for working holiday makers in Australia, check out our guide to backpacker working holidays! From visas to tax advice, let us uncomplicate your time working in Australia! 

For more assistance, and to explore the array of experiences and itineraries along the East Coast, don’t hesitate to get in touch with one of our local travel experts today!

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