Super for self-employed people
Build your own super
If you're self-employed or work as a contractor, super may not
be at the top of your priority list. But by taking action now, you
can make sure you have enough money to live on when you stop
to super when you're self-employed?
When you're employed, your employer will make contributions to
your super fund over your working life, which accumulate until you
retire. These contributions along with investment returns can then
be used to pay you a tax-free income when you retire. But what
happens when you're your own employer?
When you work for yourself it's up to you to provide for your
retirement income. Many self-employed people receive income
primarily for their labour, which means when you stop working you
stop getting paid. You can plan for that day by putting part of
your income into a super fund.
Super is an environment that gets preferential tax treatment,
meaning you generally pay less tax on earnings within super, and
you can usually get better investment returns than a bank savings
account. Your money will be locked away until you retire, but that
can be a good thing if you don't find it easy to save
contribute to super
If you already have a super fund from previous employment, check
with your fund that you can continue to make personal contributions
while self-employed. You will need to give your fund your tax file number (TFN) so they can accept
If you don't have a super fund, see Choosing a super fund for tips on
finding one that meets your needs.
If you're self-employed, always confirm the details of any super
contributions with your accountant or tax agent.
There are two ways to contribute, depending on how you pay
yourself. If you receive:
- a wage, set up a regular transfer into
super from your before-tax income (as a guide, employers currently
contribute 9.5% of an employee's 'ordinary time earnings' to
- income from business revenue, you may
find it easier to periodically transfer a lump sum to super when
you have sufficient cash flow.
For tips on how to build up your super, see Is your
super on target?.
Claiming a tax
deduction for super contributions
If you are self-employed you can claim a tax deduction for
your super contributions.
You can contribute up to $25,000 per year in concessional super contributions (those
you claim a tax deduction for) and an additional $100,000 a year in
non-concessional super contributions
(those you don't claim a tax deduction for).
See the Australian Taxation Office (ATO) for information on claiming deductions for personal super
How to be eligible for
government super contributions
If you earn less than $37,697 per year you could be eligible for
a government super contribution of up to $500. Even those earning
up to $52,697 may still be eligible for some government
contributions. Consider making after-tax contributions to super to
qualify for the government
If you earn $37,000 or less per year, you may get a 'low income
superannuation tax offset'. The amount, up to $500 annually, will
be 15% of the concessional super contributions you make
to your super account during the financial year.
Once you lodge a tax return for the financial year, the
government will work out how much you're entitled to and
automatically pay the amount into your super. See the ATO for more
details on super co-contributions.
Don't leave it too late. Start putting super
money away now to ensure you have enough to live on later.
Last updated: 13 Feb 2019