cost-of-smsf

SMSF setup costs: How much does a self managed super fund cost?

SMSFs can cost up to $12,000 a year to run, and generally need a balance above $200,000 to be cost-effective.

If you want to take charge of your superannuation and save for a more comfortable retirement, starting an SMSF may be the solution. However, before choosing the SMSF route, it’s important to not only be aware of the time and effort need to manage your investments but also the costs involved when doing it yourself.

Let’s take a closer look at how much it costs to run an SMSF and how much money you need to invest to make it a viable option for your retirement savings.

AMP SuperEdge Saver Account

AMP SuperEdge Saver Account

2.05 % p.a.

max rate

2.05 % p.a.

standard variable rate

AMP SuperEdge Saver Account

Link to your SMSF. Ongoing, variable 2.05% p.a. when you link to AMP SuperEdge Cash Account or a different transaction account for your SMSF in another bank. Available on the entire balance.

  • Maximum Rate: 2.05% p.a.
  • Standard Variable Rate: 2.05% p.a.
  • Monthly deposit required: $0.00
  • Monthly fees: $0.00
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Compare SMSF accounts

Rates last updated November 21st, 2018
$
$
months
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned Product Description
AMP SuperEdge Saver Account
2.05%
2.05%
0.00%
$0
$0 / $0
Link to your SMSF. Ongoing, variable 2.05% p.a. when you link to AMP SuperEdge Cash Account or a different transaction account for your SMSF in another bank. Available on the entire balance.
ANZ SMSF Cash Hub
1.50%
1.50%
0.00%
$0
$0 / $0
This account is for SMSF trustees to access their SMSF cash balance, to make payments and investments, and to receive income to the one account.

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How do SMSFs work?

A SMSF is a private superannuation fund, designed to help you save for retirement, that you manage and control yourself. SMSFs can have a maximum of four members. The members of an SMSF are usually also its trustees, allowing them to run the fund for their own benefit. This means you’re responsible for all decisions relating to the fund and for ensuring that you comply with all laws and tax requirements.

When you run your own SMSF you need to be able to make investment decisions that align with your financial needs for retirement. This means you’ll need the necessary financial knowledge and skills to make the right decisions, as well as manage a range of legal obligations.

But while an SMSF can be ideal if you want to take control of saving for your retirement, there are significant establishment and running costs to contend with. It’s vital that you are fully aware of these costs before deciding whether an SMSF is right for you.

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: establishment 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 and signing the trustee declaration. According to a 2013 report from Rice Warner, these setup costs can range from $345 up to $990.

However, if you choose the commonly recommended option of using a corporate trustee, where all members of the SMSF are directors of the corporate trustee, covering the resulting Australian Securities and Investment Commission (ASIC) and service provider fees can see establishment costs balloon out to anywhere between $916 and $2,035.

  • Operating costs

Just like any other super fund, there are costs associated with running an SMSF. These include the expenses associated with investing and taking care of auditing and accounting requirements for your SMSF, and you need to remember that these costs will eat into your retirement savings.

Ongoing operating costs for your SMSF include:

  • An annual ASIC corporate fee
  • Annual ATO supervisory levy
  • Audit fees
  • Costs incurred to prepare financial statements and tax returns
  • Actuarial certificates if your SMSF is paying an income stream (pension)
  • Financial advice fees
  • Valuations of assets held by the SMSF
  • Legal fees, for example, if you need to make changes to the trust deed
  • Assistance with fund administration tasks
  • Insurance for SMSF members

Some of these fees can vary widely based on the complexity of your SMSF and the costs charged by third-party providers (accountants, law firms etc.) that you hire to help ensure you comply with all ATO obligations. You can also choose between full-service providers, which take care of all the fund administration for you, or doing some of the administration yourself.

According to the Rice Warner report mentioned above, the annual operating costs of an SMSF in the accumulation phase can range from $1,163 to $2,367. However, if your SMSF provides a pension, this figure can rise as high as $2,957 per year, while if you opt for a full administration service costs can top the $8,000 mark.

  • Investment management costs

SMSFs also use managed funds for a small portion of their investments, so the third cost you need to contend with is investment management fees. These expenses vary depending on the size of your investment in managed funds, but for SMSFs with a balance of $500,000, the Rice Warner report calculated annual investment management costs of between $208 and $714.

How much does it cost to run an SMSF?

In December 2016, the ATO released its SMSFs: A statistical overview: 2014–15 report. The report revealed that the average total annual expense ratio of Australian SMSFs is 1.10%. With the average SMSF balance at $1.12 million, that’s an average annual cost of $12,200.

The table below, produced from ATO data, shows how SMSF expense ratios have changed over the past five years. The rise in expenses in 2013 reflects the fact that the ATO began including in its calculations the expenses that SMSFs in the pension phase are unable to claim as tax deductions.

20112012201320142015
Administration and operating expense ratio0.32%0.32%0.51%0.52%0.50%
Investment expense ratio0.31%0.35%0.55%0.58%0.60%
Total expense ratio0.63%0.67%1.06%1.10%1.10%

The report also revealed a few other interesting statistics:

  • 45.7% of SMSFs have an estimated total expense ratio of 1% or less
  • 59.7% of SMSFs have an estimated total expense ratio of 1.5% or less
  • SMSFs in the accumulation phase had estimated annual operating expenses of $11,700 while SMSFs in the pension phase had annual operating expenses of $12,600

How much money do I need to start an SMSF?

So what exactly do all these numbers mean? When deciding whether or not to establish an SMSF, the size of your investment matters. The simple fact is that many of the costs associated with running an SMSF are fixed expenses, so they remain exactly the same regardless of whether you have a balance of $50,000 or $2 million. These include costs such as the ATO supervisory levy, audit fees, accounting fees, and the cost of lodging tax returns with the ATO.

To illustrate this point, the ATO’s SMSFs: A statistical overview: 2014–15 report revealed that SMSFs with balances of under $50,000 had average operating expense ratios of 12.55%, while those SMSFs with balances between $500,000 and $1 million had operating cost ratios of 1.43%. The larger your SMSF balance, the less effect your annual operating expenses will have on its bottom line.

With this in mind, it’s important to calculate how large your investment amount should be in order to make establishing an SMSF a cost-effective proposition. In its 2013 report, Rice Warner crunched the numbers to determine the minimum cost-effective balance for an SMSF and produced the following findings.

Minimum cost-effective balance for an SMSF

  • Less than $100,000: SMSFs are simply not a competitive option when compared with APRA-regulated funds.
  • $100,000 to $150,000: SMSF costs can be competitive with the cost of larger retail super funds provided that the trustees undertake some of the administration duties. However, industry funds and personal super options are a cheaper alternative.
  • More than $200,000: SMSFs can be competitive with retail and industry funds if the trustees are willing to take on some of the administration.
  • More than $250,000: SMSFs can be the cheapest option for balances of this size provided that the trustees undertake some of the administration.
  • More than $500,000: If you have a balance of above $500,000, the report found that SMSFs can be the cheapest alternative, even if you opt for full-service administration.

To sum up, the report found that you would need a balance of at least $200,000 to $250,000 if you’re willing to do some of the administration yourself, while if you opt for full-service administration, this only becomes cost-effective when you have a balance of $500,000 or more.

Of course, operating costs can sometimes vary substantially from one SMSF to the next, so it’s important that you fully understand all the potential expenses involved before deciding whether an SMSF is the right choice for you.

Are SMSF setup and operating expenses tax deductible?

Yes. Many of the setup, admin and ongoing operating expenses paid by your SMSF are tax deductible with the ATO. Any tax deductions you claim for your SMSF need to relate to your assessable SMSF income (not your personal income). Here's some common expenses that your SMSF may be able to claim as a tax deduction:

  • Management and admin costs for the day-to-day running of the SMSF, such as office supplies and equipment.
  • SMSF auditor fees
  • Fees incurred for getting your SMSF tax return done with a registered tax agent
  • ASIC annual fee paid by a corporate trustee
  • Investment expenses including management fees paid to financial planners and brokerage fees
  • Fees paid to a financial planner for ongoing investment advice and portfolio maintenance
  • Fees incurred through an investment property such as rental property costs and property management fees
  • Costs relating to insurance and storage of investments like artwork, antiques and collectible items

How to claim SMSF expenses as tax deductions

You generally need to claim the expense as a tax deduction in the financial year that you incurred the expense. Like your personal tax return, SMSF trustees will need proof of receipts for the expenses they wish to claim. Any receipts that are in the name of an individual trustee rather than the SMSF's name generally cannot be claimed as a deduction. If an expense needs to be split bewteen a personal expense and an SMSF expense, your tax agent can help with this.

Compare tax agents

Getting assistance from a qualified tax professional is a safe way to ensure that you're claiming all relevant SMSF expenses as tax deductions and not making any errors in the process. Compare tax agents across Australia below.

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options Online tax returns On-site tax returns
finder Exclusive: $99 flat fee
Included in flat fee
Credit/Debit card
Bank Transfer
Pay with your tax refund (no upfront payment)
Australia wide
Melbourne
finder Exclusive: This discounted fee is only available to customers who apply for a tax return with A One Accountants through finder. Students, seniors and non-permanent residents enjoy a further discount with a $77 flat fee. Click 'Go to site' and complete the contact form to find out more. T&Cs apply. Option to pay with your tax refund for an extra fee of $22. Lodge returns online, via phone or in person.
$79*
$0 when you purchase the $49 income package
Credit/Debit card
Pay with your tax refund (no upfront payment)
Australia wide
N/A
Option to pay with your tax refund for an extra fee of $10 for basic returns. Lodge individual & company tax returns. Fast online form & free live chat.
$80*
$0 for up to $1000 of deductions
$30 for more than $1000 of deductions
Credit/Debit card
Cash
Australia wide
Sydney
Fast and reliable tax returns for individuals, businesses and self-managed super funds (SMSFs).
$80*
Business tax: starting from $250
General deductions: $0
For motor vehicle expenses: $15
Credit/Debit card
Australia wide
Perth
A boutique firm that provides personalised experiences for all customers. Ideal option for individuals and small businesses based in Perth.
One Minute Tax
One Minute Tax
$99*
$0
Credit/Debit card
Pay with your tax refund (no upfront payment)
Australia wide
Melbourne
Option to pay with your tax refund for an extra fee of $20. Lodge individual & company tax returns. Fast online form & free live chat.
$99*
$0 for up to 2 deductions
$29 for additional deductions
Credit/Debit card
Pay with your tax refund (no upfront payment)
Australia wide
Sydney
Option to pay with your tax refund for an extra fee of $29. Online and in-person tax services for individuals, sole traders and companies.
$99*
Business tax: starting from $179
$29 for up to 2 deductions
Additional $29 for extra deductions
Credit/Debit card
Bank transfer
Pay with your tax refund (no upfront payment)
N/A
Melbourne
Option to pay with your tax refund for an extra fee of $29. Basic tax returns over the phone Australia-wide. In-person individual and business tax returns in Melbourne.
$155*
finder Exclusive: $5 discount
$0 for all work related deductions
Bank transfer
Credit/Debit card
Australia wide
Canberra
finder Exclusive: $5 discount when you apply for a tax return with Bennetts Tax through finder. Click 'Go to site' and complete the contact form to find out more. Income item fee includes returns on interest, dividends, Superannuation and pension. A flexible option for individuals, sole traders and companies.

Compare up to 4 providers

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options Online tax returns
finder Exclusive: $99 flat fee
Included in flat fee
Credit/Debit card
Bank Transfer
Pay with your tax refund (no upfront payment)
Australia wide
finder Exclusive: This discounted fee is only available to customers who apply for a tax return with A One Accountants through finder. Students, seniors and non-permanent residents enjoy a further discount with a $77 flat fee. Click 'Go to site' and complete the contact form to find out more. T&Cs apply. Option to pay with your tax refund for an extra fee of $22. Lodge returns online, via phone or in person.
One Minute Tax
One Minute Tax
$99*
$0
Credit/Debit card
Pay with your tax refund (no upfront payment)
Australia wide
Option to pay with your tax refund for an extra fee of $20. Lodge individual & company tax returns. Fast online form & free live chat.
$79*
$0 when you purchase the $49 income package
Credit/Debit card
Pay with your tax refund (no upfront payment)
Australia wide
Option to pay with your tax refund for an extra fee of $10 for basic returns. Lodge individual & company tax returns. Fast online form & free live chat.
$99*
$0 for up to 2 deductions
$29 for additional deductions
Credit/Debit card
Pay with your tax refund (no upfront payment)
Australia wide
Option to pay with your tax refund for an extra fee of $29. Online and in-person tax services for individuals, sole traders and companies.
$80*
Business tax: starting from $250
General deductions: $0
For motor vehicle expenses: $15
Credit/Debit card
Australia wide
A boutique firm that provides personalised experiences for all customers. Ideal option for individuals and small businesses based in Perth.
$155*
finder Exclusive: $5 discount
$0 for all work related deductions
Bank transfer
Credit/Debit card
Australia wide
finder Exclusive: $5 discount when you apply for a tax return with Bennetts Tax through finder. Click 'Go to site' and complete the contact form to find out more. Income item fee includes returns on interest, dividends, Superannuation and pension. A flexible option for individuals, sole traders and companies.
$80*
$0 for up to $1000 of deductions
$30 for more than $1000 of deductions
Credit/Debit card
Cash
Australia wide
Fast and reliable tax returns for individuals, businesses and self-managed super funds (SMSFs).

Compare up to 4 providers

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options On-site tax returns
$99*
$0 for up to 2 deductions
$29 for additional deductions
Credit/Debit card
Pay with your tax refund (no upfront payment)
Sydney
Option to pay with your tax refund for an extra fee of $29. Online and in-person tax services for individuals, sole traders and companies.
$80*
$0 for up to $1000 of deductions
$30 for more than $1000 of deductions
Credit/Debit card
Cash
Sydney
Fast and reliable tax returns for individuals, businesses and self-managed super funds (SMSFs).

Compare up to 4 providers

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options On-site tax returns
finder Exclusive: $99 flat fee
Included in flat fee
Credit/Debit card
Bank Transfer
Pay with your tax refund (no upfront payment)
Melbourne
finder Exclusive: This discounted fee is only available to customers who apply for a tax return with A One Accountants through finder. Students, seniors and non-permanent residents enjoy a further discount with a $77 flat fee. Click 'Go to site' and complete the contact form to find out more. T&Cs apply. Option to pay with your tax refund for an extra fee of $22. Lodge returns online, via phone or in person.
$99*
Business tax: starting from $179
$29 for up to 2 deductions
Additional $29 for extra deductions
Credit/Debit card
Bank transfer
Pay with your tax refund (no upfront payment)
Melbourne
Option to pay with your tax refund for an extra fee of $29. Basic tax returns over the phone Australia-wide. In-person individual and business tax returns in Melbourne.
One Minute Tax
One Minute Tax
$99*
$0
Credit/Debit card
Pay with your tax refund (no upfront payment)
Melbourne
Option to pay with your tax refund for an extra fee of $20. Lodge individual & company tax returns. Fast online form & free live chat.

Compare up to 4 providers

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options On-site tax returns
$80*
Business tax: starting from $250
General deductions: $0
For motor vehicle expenses: $15
Credit/Debit card
Perth
A boutique firm that provides personalised experiences for all customers. Ideal option for individuals and small businesses based in Perth.

Compare up to 4 providers

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options On-site tax returns
$155*
finder Exclusive: $5 discount
$0 for all work related deductions
Bank transfer
Credit/Debit card
Canberra
finder Exclusive: $5 discount when you apply for a tax return with Bennetts Tax through finder. Click 'Go to site' and complete the contact form to find out more. Income item fee includes returns on interest, dividends, Superannuation and pension. A flexible option for individuals, sole traders and companies.

Compare up to 4 providers

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options On-site tax returns

Compare up to 4 providers

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options On-site tax returns

Compare up to 4 providers

Updated November 21st, 2018
Name Product Fee for unlimited income items (Wages) Deduction Item Fees Payment Options On-site tax returns

Compare up to 4 providers

*This is the minimum fee charged for income item tax returns. The price listed on this table is subject to terms and conditions. To find out more or to receive an accurate quote for your tax return, please visit the agent's website to submit an enquiry.

The products compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms "Best" and "Top" are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.

Tim Falk

A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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