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Superannuation for Backpackers

money growing plant and a backpacker working in a strawberry farm with the text Superannuation and TFN Explained Backpacker's GuideAlthough you may not be thinking about retirement any time soon, superannuation (or “super”) is designed for Australians who rely on it when they reach retirement age.

But for backpackers (assuming you are leaving Australia) it can be nice boost in your savings when you leave.

In this article, I will discuss the most important aspects to understand about your “Super”, why you’re entitled to it, how to make sure you’re getting it paid properly by employers and most importantly how to get as much as possible back.

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What is Superannuation?

Am I entitled to Australian super?

Superannuation (or ‘super’) in Australia is a retirement system that your employer pays ON TOP of your pay at a minimum rate 11.5% (this rate will rise another 0.5% reaching 12% by 1 July 2025).

The great thing about super is that you can get a good amount if it back when you leave Australia permanently.  

In the meantime, superannuation is usually done through a superannuation company which invests in other businesses privately or on the stock market to get you a return on your money. 

The minimum income threshold to be eligible for superannuation contributions by your employer is $450 per month. Anyone eligible to work in Australia is entitled to super.

Note: you MUST have a TFN (tax file number) to claim super from employers (I will explain this in more detail below).

How do I set up a superannuation account in Australia?

There are a number (dozens) of options when it comes to choosing a business to handle your superannuation.

You’ll want to consider things like their average returns on investment, how aggressive their risk-taking in investments is, their ranking position on annual reports for the best superfund, and what they specifically invest in if this is something on your radar (are they supporting coal and oil or are they an ethical super fund?).

Some Super Funds:

These are a few of the highly-rated and varied superannuation funds that you should consider:

Good returns (historically):

Ethical Options

Employers usually set up their own super funds for employees, but if you plan on working and travelling a fair amount around Australia, it could be a better idea to set up your own super account and ask your employer to pay your super into that account. When you’re opening your first bank account (or even after you have opened your first bank account), you can also ask your bank to set up a super account for you if you’re really lost!

How to Access Your Superannuation

piggy bank savings with coins and australian dollar billsYou’ll need to create an account with the Australia Taxation Office online (your place for all things official in AU) to readily access information about how much money you have in your fund. If you signed up for your own fund, then go directly through their website with your login information.

If you have had more than one employer, there is an option to consolidate all of your super into one fund on the ATO website. But this is not always 100% accurate (as some employers forget or simply don’t pay your super as they should), which is why keeping track of your jobs will come in handy. 

Always ask for your super details before you leave a job; this will make it a lot easier when it comes to claiming back your super. This is free money, don’t lose out on it!

When can I claim my superannuation?

Submit a claim to withdraw superannuation when leaving Australia through the ATO website, and you’ll need details such as your details (name, date of birth), your passport number, superannuation fund and membership number, and your Australian tax file number (TFN).

You can claim your superannuation once you have left Australia and your visa has expired or been cancelled. They sometimes have the option to fill out a form at the airport, as well. The unfortunate catch to this is that all superannuation for working holiday visa holders is taxed at a rate of 65%.

But for anyone continuing in their travels, that extra cash is certainly worth following up on. 

As per taxback data of 2023, the average super refund they’ve claimed for backpackers is around $2,000 AUD. So, it can be worth checking and see how much you get.

How long will it take to get my superannuation back?

Ideally, you should receive your super within 28 days of the Australian Tax Office receiving your application. If more paperwork is required the process may be delayed, this can happen if your super claim is over $5,000.

Important Superannuation Tips

If you work for cash, you probably won’t be getting any super. While that may seem like a better option at the time, you will be losing out on serious money in the long term. Those who do contract-style work will need an Australian Business Number (ABN), and you’ll be responsible for paying your tax and super. Again, more money upfront, but you’ll have to taxes when they come up in July.
To find out how much tax you could get back this year, check out our tax back page. Backpackers are taxed at a rate of 15% from $0-$45,000, and the average refund is around $1,900!

What is a Tax File Number (TFN)?

Your TFN is used by the ATO to keep track of your superannuation payments and is similar to the NI number in the UK, the PPS in Ireland, SIN in Canada, or SSN in US. It acts as an identification number that links you and your money.

You have 28 days to provide this number to your employer. If you don’t the consequence is a 45% tax rate, which is 3x higher than the standard rate of 15%. It is your responsibility to give your TFN to your employer. Since it usually takes at least a couple of weeks to get your TFN after you have applied for it, it’s really best to sort it out ASAP when you arrive in AU.

Watch this video to learn the dos and don’ts of applying for your TFN.

How Do You Apply for a Tax File Number (TFN)?

DIY: Apply For Your Own TFN

You can apply for a TFN through the Australian Tax Office website. It usually takes about 10-28 days to be issued. The main challenge working holidaymakers face when applying directly through the ATO is that you need a postal address in Australia (the address you use needs to be secure since they are sending a highly sensitive piece of information).

If you have an Australian address and you will be there to receive your number in the next 28 days then “no worries mate”, go ahead and apply. You will also need to provide details including your passport or travel document/visa number, your name, and contact details for yourself or your preferred contact person.

Get Assistance- Arrange your TFN through a travellers company

It is relatively straightforward to get a TFN yourself, however, some travellers can use a company offer to assist them.

Using a traveller’s company has a key advantage: often, you do not need an Australian address, and they will email your TFN to you instead of in the post. For many working holidaymakers who are just about to arrive or who have just arrived and are staying in a hostel while looking for work, this may be be helpful.

How Do I Apply For an ABN?

Apply for an ABN through the government website here. If you find a site that is trying to charge you, you’re on the wrong one!

An ABN allows you to run your own business, whether it’s just you as an individual or you have a company. The application will guide you and ask questions to see if your line of work is eligible. If approved, you would be responsible for paying your own taxes and superannuation, but there’s a lot of flexibility and freedom in being your own boss – and you can charge your own rates! This is something to look into if you like to keep things fresh and interesting with varied work.

Final Thoughts On Superannuation for Backpackers

If you’ve already started applying for jobs in Australia, you may have seen the term ‘superannuation’ or ‘super’ mentioned. Mandatory superannuation is paid by employers on your behalf (in addition to your wages) into a fund. The idea is that if you stay working in Australia until retirement age, you can access this money as income. For backpackers, however, since you are not retiring in Australia, you are entitled to get a portion of this money back when you leave!

For many backpackers, this is forced savings and a fantastic way to go home or launch into the next adventure.

We hope this article clarifies superannuation and its many benefits within Australia for backpackers.

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