Workers are being urged to check their payslips and super accounts as minimum contributions rise from this week.

From July 1 the super guarantee will increase to 11 per cent as part of an annual 0.5 per cent rise to reach 12 per cent in 2025.

This means, on top of paying a regular salary, employers will be required to make a contribution amounting to a minimum of 11 per cent of a worker’s earnings towards their nominated superannuation fund.

Bernie Dean, chief executive of Industry Super Australia (ISA), said while the super guarantee hike might just amount to an extra few dollars per week, this could add up to a much larger nest egg over time – especially when accrued interest is taken into account.

“The increase might only be an extra few hundred dollars a year for most workers, but for the typical 30-year-old, that can mean as much as $50,000 extra in their nest egg on retirement,” he said.

“That’s because of the power of both compounding interest, and also the the investment returns that are paid into members’ accounts if you’re with a fund that delivers a good investment return.”

But the super guarantee hike will do nothing for you if your employer does not put the required contributions into your account.

Billions stolen from workers

ISA found in 2018-19, unpaid super affected more than 25 per cent of employees, costing each affected worker an average of $1700 per year.

Australian employees missed out on $5 billion in employer super contributions.

Those most commonly stolen from were young workers, low-wage workers and workers in industries like construction, transport, trades, hospitality and accommodation.

Although the majority of employers do the right thing and pay exactly what’s required, it’s important for employees to be vigilant, Mr Dean said.

Once this year’s super guarantee hike has taken effect, workers should check their payslips to ensure that their employers have increased the amount.

It is also crucial to check with your super fund to make sure the amount of contributions you are owed has gone into your account.

Super is required by law to be paid at least quarterly, but that is set to change on July 1, 2026, when employers will be required to pay super on payday.

This move should make it easier to check your super contributions are being made, and also means your savings will start accruing interest earlier.

“We do know that, historically, quite a few workers, especially younger workers and people in casual employment, have actually been missing out on super contributions,” Mr Dean said.

“[The end of financial year] is a good time to do both; check the rate that you’re getting on your super contribution, and check whether that contribution that’s put on your payslip is actually making it into your super account.

“Incremental increases in the super guarantee are designed to be affordable for employers, and at the same time, [to] build up a really good-size nest egg for workers so that they can have a more secure future,” Mr Dean said.

How much super do you need?

The amount of super you should have accumulated by your retirement is hard to calculate; everyone has different earning capacities, spending habits and needs.

“One person’s nest egg is another person’s goldmine,” Mr Dean said.

But the most recent information released by the Association of Superannuation Funds of Australia in March found the average lump sum needed for a ‘comfortable’ retirement at age 67 is $690,000 for a couple, and $595,000 for a single person.

Gender gap widens

Women retire with less than men, on average, and the gap is widening.

In June 2021, the average super balance for a woman aged 65 to 69 was $229,155 while men of the same age had $257,340.

The difference is largely attributed to women making up more of the low-wage workforce, as well as pressures to confirm to traditional gender roles and reduce work or leave it behind altogether to take care of their families.

“That’s a problem [and] we need to address that,” Mr Dean said.

“And we need to make sure that it’s not women that are missing out on the chance of a dignified life in retirement because of structural disadvantage, when they don’t get paid superannuation on payments when they’re not in paid work, or they’re on different types of leave like maternity leave.

“These are things that need to be fixed.”

The New Daily is owned by Industry Super Holdings