Can I make super contributions while working overseas?

22 June 2018
Working overseas can be a fantastic opportunity to explore the world, meet new people and have new experiences. But working out what this means for your Australian super account can be a bit tricky.

Do you have to continue making super contributions? And if you don’t, should you? Or does it make more sense to start new retirement savings where you now work?

If you’re working overseas for an Australian employer, there’s a good chance they will still be legally required to make super contributions for you, particularly if you’re only overseas for a short period. While these super payments will continue automatically, you may also be required to make payments to a retirement scheme in the country you are now working in, like social security in the US or a pension fund in the UK.

Avoid doubling up

It’s important to find out if the country you’re working in has an agreement with Australia to prevent you doubling up on retirement payments. If this is the case then you may be able to obtain a certificate of coverage, exempting you from the foreign retirement scheme. According to the Australian Taxation Office (ATO), Australia currently has agreements with many of the most popular destinations for Australians working overseas, like the US, Singapore and Germany. For a full list of countries with a social security agreement, check the ATO website here.

Even if you aren’t required to make super contributions while you’re overseas, you typically still can if you want to. As detailed by the ATO, these contributions will generally be classed as non-concessional payments, the same as if you made a contribution with your post-tax income in Australia. The ATO indicates that you usually won’t have to pay any extra tax to the Australian government when you make these payments, but you are limited in how much you can put into your super. According to the ATO, broadly speaking, your maximum non-concessional contribution is $100,000 in a single year, or up to $300,000 at once over three years if you’re under 65 and can access the ‘bring forward’ rules. Make sure to read our guide on voluntary super contributions for more details.

Working overseas with a SMSF

If you’re a member/trustee of a self managed super fund (SMSF), things can get a bit tricky, and you need to be aware of the rules to avoid inadvertently causing  a problem for yourself and any other fund member/trustees. According to the ATO, making contributions to a SMSF while you are abroad can be complicated and potentially expose you and your SMSF to serious tax liabilities, particularly if you will be absent from Australia for two years or more. If you have extended travel plans, or there’s a possibility you may not return within the time frame, it is a good idea to investigate making alternative arrangements for your retirement savings.

The ATO suggests that you also need to be aware of the taxation system in the country you’re working and whether there are any taxes applicable to super contributions or if there are better retirement savings options available. In some countries, you might be able to access the local retirement scheme which could have lower taxes or even no taxes on contributions, then transfer your earnings to Australia at a later date. Your Australian super fund may even accept contributions made in other currencies. The exact circumstances will depend on your specific situation, so don’t be afraid to seek out expert independent advice.

No matter what, your super in Australia will remain. Just make sure to notify your fund trustee that you will be moving overseas to confirm they will continue to administrate it for you. Some super fund trustees won’t provide services for people who don’t live in Australia and you may be required to move fund. In this case you can easily compare super funds and find one that will manage your super while you’re away and provide you with great value.

If you’re comparing Superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for Australians aged 30-39 with a balance of up to $55,000, sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Use Canstar’s superannuation comparison selector to view a wider range of super funds.

Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group you selected.

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