A Beginner’s Guide to Types of Superannuation Funds in Australia
Jamie Walsh • December 17, 2024
A Beginner’s Guide to Types of Superannuation Funds in Australia
A Beginner’s Guide to Types of Superannuation Funds in Australia
Superannuation (or “super”) is Australia’s way of helping you save for retirement. While it may seem complicated at first, understanding the basics is essential, especially when you’re just starting your career. Here’s a quick overview of the main types of super funds in Australia:
- Employer Super Funds: These are often set up by your employer, particularly for government jobs or large corporations. They are tailored to specific workplaces and may offer extra benefits like insurance or reduced fees.
- Retail Funds: Run by financial institutions like banks or investment companies, retail funds are open to anyone. They often provide a wide range of investment options but may come with higher fees.
- Industry Funds: Originally created for workers in specific industries (like construction or healthcare), these funds are now open to most people. They usually have lower fees and focus on simple investment options.
- Self-Managed Super Funds (SMSFs): If you want more control over your investments, you can manage your own super fund. However, this option requires time, expertise, and compliance with strict rules.
When you start a job, your employer will ask for your super details. If you don’t have one, they’ll create one for you, but it’s worth researching which type of fund suits you best.
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Labor's $1,000 instant tax deduction aims to simplify claiming work-related deductions As promised in its election campaign, the Labor Government may introduce a $1,000 instant tax deduction for work-related expenses from the 2026–27 income year. Simplifying claiming work-related deductions The proposed measure will allow taxpayers to choose to claim a $1,000 instant tax deduction instead of claiming individual work-related expenses. Taxpayers who choose to claim this instant deduction will not be required to collect receipts for deductions less than $1,000 in total. Eligibility To be eligible for the instant tax deduction: a taxpayer must earn labour income for example salaries and wages a taxpayer must not exclusively earn business or investment income. Taxpayers who earn business or investment income may continue to claim their tax deductions in the usual way. Other deductions Charitable donations and other non-work related deductions would continue to be claimed on top of this instant tax deduction. This concession will be welcomed by many workers, but it does not seem to make sense from the Government point of view. If a taxpayer has under $1,000 in deductions, he or she can choose the $1,000 deduction. If the actual deductions are more than $1,000 he or she will naturally claim the higher amount. From the ATO point of view, this seems to be a case of "Heads the taxpayer wins and tails we lose". The concession is not peanuts. it is expected to increase tax refunds by $2.4 billion "over the forward estimates" which is code for the next three years, but as it does not start until 2026-27 tax returns, that appears to translate to $1.4 billion per year. Perhaps we should not get to excited until we see the wording of the actual legislation. Contact Us Have queries? We are here to help you navigate through them, please feel free get in contact with us.
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