self employed

A guide about superannuation for self employed workers

Superannuation and self employed workers

For many workers across Australia, having a superannuation fund provides them with financial security and peace of mind for the future, as this enables them to save safety and cost effectively for their retirement years. Having a superannuation fund offers a range of perks and benefits, most notably the tax savings that can be made by saving for your retirement by way of superannuation fund contributions. For those who are employed, there is also the added benefit of the contributions that are made into the fund by employers as well, which can help to bump up retirement funds for employees.

Of course, it is not just those who are working for someone else who need to think about their financial futures and their retirement. There are also many self employed people who do not have an employer as such but are still keen to try and secure their financial futures and be able to enjoy a comfortable and relaxing retirement without the worry of finances hanging over their heads. For self employed people it is just as important to think about retirement funding, as even though you might work for yourself it is unlikely that you are going to want to – or be able to – continue working for the rest of your life in order to ensure you have money coming in. This is why it is just as important for self employed people to think carefully about their superannuation as it is for those who are employed.

More information about superannuation for the self employed

Many self employed people will be keen to secure their financial futures with superannuation and there are a number of things to take into consideration in regards to this type of fund as a self employed worker. This includes:

    • Can you get super if you are self employed? Some people are unsure as to whether they can get super if they are self employed as opposed to being employed. The answer to this is, yes, you can get super if you are self employed. However, you need to bear in mind that because you are self employed you will not have an employer to make compulsory contributions under the Superannuation Guarantee in the same way as someone who is employed. Therefore, you will need to be reliant on the contributions that you make yourself coupled with any profit you make from your chosen investments.
    • Is it worth getting super if you are self employed? You may question whether, as a self employed worker, it is worth opting for super if there are no employer contributions to benefit from under the Superannuation Guarantee. However, you need to bear in mind that your contributions will benefit from tax savings, just like an employer's contributions would and this can mount up to significant savings, resulting in a fuller pot for your retirement. You can find out the details from the Australian Taxation Office, as percentage deductions and age limits can vary and can change on an annual basis.
    • Which fund should you choose? When choosing a fund there are a number of options available to you. This includes options such as banks, financial institutions and insurance companies. These tend to be public offer funds that accept contributions from the public. There are, of course, certain things that you should take into consideration when you are choosing your funds as a self employed worker. This includes:
      • Taking time to determine what the administrative fees are
      • Checking the reputation of the institution and looking at investment performance
      • Looking at the various insurance cover options

Find out more about online super funds options

  • Will the fund come with disability and death benefits? This will be dependent on the fund and is something that you will need to check on. However, you will normally be able to pay a premium to get this cover, with the premium often being deducted from your account.
  • How involved will you be in choosing investments? If you are getting superannuation as a self employed worker you will usually be able to have some input into the investments that are chosen. However, there will be limitations on your involvement and most of the decisions will be made by the trustees.
  • What about setting up a self managed fund? Another option for a self employed worker is to set up your own fund, which is known as a self managed fund. In order to run your own superannuation fund you will generally need around $200,000 according to the Australian Securities and Investment Commission. If this is something that you want to look into more closely, or if you want to simply learn about the pros and cons of these self managed funds, you should ensure you seek the advice and assistance of a qualified and experienced accountant.

It is important that user considers the risk and cost involved with their superannuation fund. Strictly check the time commitment required and other significant terms and conditions before committing to any funds.

Learn more about LifeTime Financial Group for advice on setting up an SMSF

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4 Responses

  1. Default Gravatar
    WillemJanuary 28, 2014

    Above you say there is no employer contribution for self-employed workers so it’s tax savings that are significant. Is this all that a self-employed worker gets?

    So if the worker gets less than the tax threshold each year or thereabouts there is really no point? He is basically just paying tax. Is this it?

    • Staff
      MarcJanuary 28, 2014Staff

      Hi Willem,
      thanks for the question.

      Unfortunately I’m not able to comment on whether or not being self-employed is effective from a tax perspective. It should be known that self-employed workers also get super-related benefits such as the ability to claim a full tax deduction for super contributions, and I’ve emailed you a page from the ATO regarding this.

      I hope this helps,

  2. Default Gravatar
    JohnAugust 7, 2013

    Can a self employed person join an industry super fund if so which ones

    • Staff
      ShirleyAugust 8, 2013Staff

      Hi John,

      Thanks for your comment.

      Yes, there are industry super fund options for the self-employed.
      Industry Superfund is one that offers services to the self-employed. Depending on what sector you’re in, there could be Retail funds and Public sector fund.


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