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Australian Superannuation for Expats: A General Guide

Australian Superannuation for Expats: A General Guide

If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).


The considerations that an expat must make when managing Australian superannuation for expats are very different from those of the typical superannuation investor in Australia.

One of the main reasons you should work with a specialist to manage your superannuation when you are offshore is because of this.

The good news is that there is no distinction made between residents and non-residents in the superannuation laws and regulations.

A fund trustee is permitted to accept contributions from non-residents as long as the Australian expat complies with the applicable Superannuation Industry (Supervision) Act contribution rules.

When used properly, the Australian superannuation system offers a very efficient method of retirement planning and can guarantee that, when it’s time to slow down, your portfolio will support you and your family well into your later years.

The assurance that the goals you are working toward now will help you achieve a self-sufficient retirement in the future is crucial.

What is an Australian Superannuation for Expats?

Superannuation, or simply “super,” is a government-sponsored program that enables Australians (and foreigners who work in Australia) to build up savings that will support them financially when they retire.

The Australian superannuation system, while obviously different in many ways, is comparable to the 401(k) plan in the United States and the National Insurance Scheme in the United Kingdom in that super is all about saving for the future.

In addition to paying your salary or wages when you start working in Sydney, your employer is required by law to contribute to your superannuation when you do.

No matter if you are a full-time employee, a casual employee, an Australian citizen, or a non-resident, your employer is typically required to make contributions to your superannuation if you are over 18 and make at least $450 before taxes per month from your work in Australia. 

A Superannuation guarantee, or SG, contribution is the name of this payment from your employer. SG contributions must currently equal at least 9.5% of your regular earnings for Australian employers to be required to make them.

Australian Superannuation for Expats: A General Guide
“Super” is an Australian retirement fund.

How to Use Your Australian Superannuation for Expats as a Non-Resident

The tax treatment of the income payments from a super pension can be started by an Australian expat who has fulfilled a condition of release if they reside in a nation with a double tax agreement (DTA) with Australia. Whether or not they do so will determine how the super pension is taxed.

DTAs assign taxing rights over the income classes covered by the agreement in an effort to prevent double taxation. The DTA mandates that the country of residence give a credit for Australian taxes paid when both that country and Australia (the source country) tax an amount of income.

If there is no DTA and the member is under 60 or the pension income is from an untaxed source, the pension income is included as assessable income in Australia.

A 15% tax offset may also be available to the member (or a 10% tax offset for income payments made from sources that are not subject to tax).

How to Choose a Superannuation Fund

Most of the time, you get to pick the super fund into which your employer will put the SG contributions.

This is due to the fact that super funds vary, so you have the right to select the fund that best suits your needs.

Typically, your employer will provide you with a Superannuation Standard Choice Form to complete; alternatively, you can complete one yourself and submit it to your employer to let them know your preference. Your employer will select a fund for you if you opt not to do so yourself.

Rules for Contributions to Australian Superannuation for Expats

If they are regarded as eligible people as defined in s290-160 of ITAA97, Australian expats may be able to claim personal super contributions as a tax deduction.

One of the main requirements is that the member’s income from eligible employment in the year the contribution is made must not exceed 10% of total income.

Income from employment outside of Australia is not assessable and is not included in the “10% test” for Australian expats. As a result, claiming a tax deduction on personal super contributions may be advantageous for a non-resident with Australian-sourced income, such as rental property income.

Aside from being excluded from assessable income and being subject to withholding tax, an Australian expat’s income from interest, dividends, and royalties cannot be offset by making a tax deduction claim.

Your Visa and Australian Superannuation for Expats

There are a few additional factors to take into account when it comes to your super if you are moving to Sydney or already reside here.

You can use your super as a Departing Australia Superannuation Payment if you ever decide to move back home (DASP).

In Australia, you normally can’t access your super until you turn 65 (this is known as your “preservation age”), but if you meet all the requirements, a DASP allows you to take the super you’ve accumulated home with you.

The government implemented a new DASP tax of 65% for working vacationers in December 2016. (WHM). If you possess a 417 visa, a 462 visa, or an associated bridging visa, you are regarded as a WHM.

However, a transient resident who is not a WHM continues to receive the same DASP tax treatment. On the Australian Tax Office website, you can review the various rates.

Being eligible for DASP is great because it enables you to bring a small nest egg back to your home country once your employment in Sydney is finished.

Australian Superannuation for Expats: A General Guide
Retirement Fund

4 Tips for Managing Your Australian Superannuation for Expats

1. Take extra caution

As an Australian expat, you should exercise extreme caution if you have a Self-Managed Superannuation Fund (SMSF), as control of one is required to be in Australia in accordance with the residency rules.

If you are a trustee who is based overseas, whether as an individual or as a director of a company that is a trustee, your super fund may be deemed to be out of compliance, subjecting you to severe financial penalties.

This is because control is not being maintained in Australia. It is essential that you speak with a licensed adviser who specializes in this field if you do have an SMSF and are planning to move to another country or already reside there in order to make sure that the proper measures are taken.

2. Take charge of your superannuation

Just because an Australian expat lives abroad does not mean that they should disregard their superannuation at home.

By taking an interest in and getting involved in the management of your Australian expat superannuation, which is a very effective tool for retirement planning, you might find that the extra effort may translate into better returns that will undoubtedly help you in your later years.

3. Consider consolidating your superannuation funds

The majority of Australian expats have held a variety of positions prior to moving abroad, and frequently, each employer would suggest a different superannuation fund.

4. Transfer your existing pension abroad into your Australian superannuation for expats.

Don’t forget about any pensions and provident funds you may have amassed abroad when you decide to return to Australia. Depending on the country where you amassed the pension, you might be able to transfer that pension directly into your Australian superannuation fund.

Final Thoughts

It is incredibly fulfilling to work and live in Sydney. Superannuation is one of the new systems that must be understood when you first come to Australia.

You won’t regret learning about your super, though, as it exists solely for your future and personal benefit.

When in doubt, always consult a qualified financial planner who can help you determine the best course of action for your savings and superannuation.

Pained by financial indecision? Want to invest with Adam?

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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

This website is not designed for American resident readers, or for people from any country where buying investments or distributing such information is illegal. This website is not a solicitation to invest, nor tax, legal, financial or investment advice. We only deal with investors who are expats or high-net-worth/self-certified  individuals, on a non-solicitation basis. Not for the retail market.



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