Ladies, mind the gap – how the gender pay gap could affect your future

On average there’s still a considerable gap between men and women when it comes to retirement savings. We look at some of the reasons why and suggest five tips to help women bridge the gap.

Considering women live longer than men on average (84.6 years for women compared to 80.5 years for men)1, it’s important for women to have enough money invested for their retirement. Statistics show women have consistently lower super balances than their male counterparts throughout their lives2.

What are some of the reasons behind this?

One of the reasons for the super gap is because on average, women earn less money than men. According to recent statistics3, the gender pay gap is 17.2 per cent, which means women only earn 83 cents for every dollar a man earns.

The gender pay gap is influenced by a number of factors4, including women being more likely to be primary carers for family members such as children, elderly relatives or people with disabilities, work in part time or casual jobs, holding lower-paid roles and being less represented in senior executive positions.

Women in small business

Women are also under-represented in small business, with figures showing 34.9 per cent of small business owners are women5.

The majority of Australian small businesses (61 per cent) are sole traders and since sole traders6 generally aren’t required to make superannuation guarantee (SG) payments for themselves7, this means women who are self-employed or run small businesses may not be making regular contributions to their super. This reinforces the super gap many women face in retirement.

It all adds up – or doesn’t

These factors combine to contribute to a considerable wealth gap in retirement. Fortunately, there are steps women can take to help them be financially better off in retirement. The sooner women take action, the better off they are likely to be.

5 tips to help bridge the gap

Here are five options to help women boost their super savings.

1. Salary sacrifice

If you have extra cash or income at any time, you could salary sacrifice to build your retirement funds and potentially reduce your taxable income. If your employer offers the option to salary sacrifice, you can ask to allocate a portion of your before-tax wage or salary as an extra contribution to super. Salary sacrifice contributions come out of your before-tax salary and are only taxed at 15 per cent8, up to certain limits. This tax rate may be less than your normal tax rate, so salary sacrificing could be a way to build your super balance and reduce your taxable income at the same time.

2. Make non-concessional (or after-tax) contributions

You may be able to contribute extra to your super if you have spare cash from an inheritance, dividend payments, a bonus or even just change after bills. You can make after-tax contributions to your super account of up to $100,000 each financial year, provided your total super balance at the start of the financial year is less than $1.6 million9. If you are aged under 65, you may be able to bring forward up to three years of after-tax contributions, allowing you to invest up to $300,000 in one go10.

3. Spouse contributions

Your spouse may be able to add money to your super from his or her after-tax income. If you are not working or are on a low income and your spouse contributes to your super fund, your spouse may be entitled to a tax offset of up to $54011 if certain criteria are met. This could mean your spouse saves on tax today while helping you to grow savings for your retirement.

4. Government co-contribution

If your salary is below a certain threshold, you may be eligible for a government co-contribution to your super fund of up to $50012. You will need to make an after-tax personal contribution to be eligible to receive a government co-contribution. These rules are complex, so check the ATO’s site for more details.

5. Review your situation regularly

Your financial needs and priorities may change over time as your circumstances change, such as getting married, having a child, going through a relationship break up, or if your partner passes away. You may want to consider protecting your savings to account for any changes like these by updating your will, super beneficiaries, insurance or any other financial commitments you may have.

Investing for the long-term

It’s important to remember super is a long-term investment. Generally, contributions to a superannuation fund are preserved and the government has placed restrictions on when you can access your preserved benefits. There are also annual limits that apply to the amount you can add to your super each year. So it is important to consider how much you have already added to your account (or accounts) during the financial year to know which strategies can work for you. See the ATO website for more information.

Need help exploring your options to help you build enough super to retire on? Contact us or speak to your financial adviser.

Next: Wealth building for women


1 The Australian Institute of Health and Welfare, accessed 29/07/20,
2 Rice Warner data, 2019, accessed 29/07/20,
3 Australian Human Rights Commission, accessed 29/07/20,
4 Australian Human Rights Commission, accessed 29/07/20,
5 Department of Education, Skills and Employment, accessed 29/07/20,
6 Australian Small Business and Family Enterprise Ombudsman, accessed 29/07/20,
7 Australian Taxation Office, accessed 29/07/20
8 The Australian Taxation Office, accessed 29/07/20,
9 The Australian Taxation Office, accessed 29/07/20,
10 The Australian Taxation Office, accessed 29/07/20,
11 The Australian Taxation Office, accessed 29/07/20,
12 The Australian Taxation Office, accessed 29/07/20,

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This information is current as at 30 September 2020. 

This information has been prepared without taking account of your personal objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

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The tax position described is a general statement and is for guidance only. It has not been prepared by a registered tax agent. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. 

Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or visit the ATO website.