SMSF setup fees and costs

SMSFs provide much greater investment freedom for your superannuation compared to a typical industry or retail fund. However, before choosing the SMSF route, it’s important to not only be aware of the time and effort needed to manage your investments but also the costs involved.

How much does an SMSF cost?

According to ATO data for 2020-21, the median annual runnning cost for an SMSF is $8,611. This varies depending on your balance, as you can see in the following table.

This doesn't include the initial set up costs for your SMSF, which are usually a one-off cost rather than annual expense.

"You might choose to run your own SMSF because you feel you can do a better job than the retail or industry superannuation funds, and want the freedom to invest in alternative assets such as property or collectables such as artwork. You're also a good candidate to manage an SMSF if you enjoy and have the time to spend managing your own money. However, SMSF compliance can be onerous and penalties for non-compliance are tough."

Pascale Helyar-Moray

Superannuation and wealth expert

Finder survey: How many Australians get professional help to manage their SMSF?

What costs are associated with running an SMSF?

There are a range of costs associated with setting up and running an SMSF. These costs can be broadly separated into three categories: setup costs, operating costs and investment management costs.

Establishment costs

If you wish to run an SMSF you will first need to formally establish the fund. This involves obtaining a trust deed, appointing a trustee (learn about the different types of SMSF trustee structures) and signing the trustee declaration.

Depending on the type of trustee structure you choose and any SMSF establishment services you engage, these costs can range from $500 to $3,000.

Operating costs

These include the expenses associated with investing and the auditing and accounting requirements for your SMSF.

Ongoing operating costs for your SMSF include:

Investment management costs

Like any super fund or private investment, there are fees for investing within an SMSF. Some of these include:

• Brokerage fees when trading shares
• Investment management fees for managed funds and ETFs
• Commissions for any fund managers and advisors
• Stamp duty, mortgage broker, or real estate agent fees on residental property

How much money do I need to start an SMSF?

Prior to 2022, ASIC had recommended that people should have at least $500,000 to invest in order for an SMSF to be cost effective compared to a standard fund. However, the updated balance guideline today is closer to $200,000.

According to the SMSF Association, its research found there was no major differences in performance outcomes for SMSF with balances between $200,000 and $500,000. However, it did find that SMSFs with balances below $200,000 were not competitive against standard retail or industry funds.

So while there is no set rule around how much money you need to start an SMSF, the guideline is at least $200,000.

Expert insight: Think carefully before setting up an SMSF

"While SMSFs are often promoted by advisers and accountants as the ultimate choice for those seeking control and flexibility over their superannuation, they are not suited for everyone. The benefits of SMSFs come with significant responsibilities, costs and risks that need careful consideration.

Think of it like owning a car. While car ownership offers freedom, the ease and practicality of alternatives like public transport or rideshare may outweigh the complexities and expenses of car ownership."

Antony Selby

Financial adviser, Financial Spectrum

Frequently asked questions

• Can I start a SMSF with $100,000?

  Yes, you can start an SMSF with $100,000. But while there are no rules in place for this, the ATO suggests you'll likely need at least $200,000 to make it cost-effective due to fees and administrative costs.

• How much tax do you pay on an SMSF?

  SMSFs generally pay 15% tax on income, the same as regular super funds. If the SMSF is in the pension phase, tax on investment earnings may reduce to 0%.

• Is it worth setting up a SMSF?

  Setting up an SMSF can be worth it if you want more control over your investments and have sufficient funds to manage the costs effectively. However, SMSFs require significant time and expertise to manage.

• How much money can I put into my SMSF?

  There are limits to how much you can contribute to your SMSF each year. The concessional (pre-tax) contribution cap is $30,000, and the non-concessional (after-tax) contribution cap is $110,000. This is the same limit for standard super funds.

To make sure you get accurate and helpful information, this guide has been reviewed by Pascale Helyar-Moray, a member of Finder's Editorial Review Board.

Written by

Alison Banney

Editorial Manager, Money

Alison is an editor at Finder and a personal finance journalist with over 10 years of experience, having contributed to major financial institutions and publications such as Westpac, Money Magazine, and Yahoo Finance. She is frequently quoted in media outlets like SmartCompany and SBS, offering expert insights on superannuation and money management. Alison holds a Bachelor of Communications in Public Relations and Journalism from the University of Newcastle, and has earned three ASIC RG146 certifications in superannuation, securities and managed investments and general financial advice, ensuring her expertise is fully aligned with ASIC standards. See full bio

Alison's expertise

Alison has written 655 Finder guides across topics including:

• Superannuation
• Savings accounts, bank accounts and term deposits
• Budgeting and money-saving hacks
• Managing the cost of living