Selecting the right superannuation fund for your organisation is crucial for both employer and employees. It will impact how your business operates, your employee relations, and the quality of retirement benefits for your people.

Wealth Smart’s Superannuation Employer Contribution Solutions

As an employer, one of the most valuable assets of a business is the employees. To ensure your ‘assets’ are well looked after and protected, employers need to ensure that they are satisfied with superannuation employer contributions. The super fund should also be straightforward and uncomplicated. Employers must select a superannuation fund that suits the employer, the industry, and the employee. The fund will affect how the company operates, the different relations between employees and the type of retirement benefits employees get.

In some cases, superannuation employer contributions are not allowed. In many cases, the employer must make a superannuation employer contribution by law. If you are self-employed, you can curate and invest in a self-employed superannuation fund.

Wealth Smart prides itself on offering a solution customised to meet the needs and wants of the business and its employees. Wealth Smart has achieved this by sourcing a comprehensive and competitively priced super fund in the market, which results in the compliant Company Super Fund.

Wealth Smart also works with employers to assist them in finding the most effective programme and financial products that benefit their employees. This programme includes, but is not limited to, superannuation employer contributions. Wealth Smart proffers super and economic life planning activities to educate the employer and employee about the super plan. Top talents and higher retention rates have been noted due to the opportunity to obtain employer superannuation benefits.

The services that Wealth Smart offers are:

Tender Management

If an employer has chosen to outsource their industry super fund or to change their existing funds, Wealth Smart will step in and manage a full tender on their behalf. Wealth Smart will take self employed individuals through a wide range of options to find an option that suits the needs and wants of the employer and employee superannuation objectives. Wealth Smart uses this guidance to help employers save money and meet compliance goals.

Transition Management

Wealth Smart offers self employed people a trained and dedicated group of team members, advisors, and an appointed fund manager to take control of the different areas of the business or organisation’s transition. Wealth Smart also promises to have a smooth implementation in place for the core business. This implementation will also minimise costs for the members of the company.

Ongoing Super Fund Service Support for Self Employed People

After the implementation, self employed people and other employers must maintain the process to ensure that the platform runs smoothly. The smooth running of the platform will help ensure that the employer can focus on the day-to-day business processes. Wealth Smart will secure the population of the platform’s maintenance with service levels with which all parties agree.

Factors for employers to consider should include the degree of contact required, the levels of reporting across all tiers, the communications’ timeframes and process, and the timing of the regular reviews. The periodic reviews would cover the market, how the company fund performs within the market, and the processes from the administration’s point of view.

Communications and Education

Wealth Smart aims to educate the members to have enough information regarding the benefits and advantages to potential new members. Wealth Smart will achieve this by supporting the organisation through communications and education programmes.

The support consists of educational programmes that will be developed and implemented. Moreover, there will be group seminars, individual support and advice, regular member communications, and access to a member-only online resource centre. Employees can use this information to make better-informed financial decisions about financial products.

Employee Benefits

Wealth Smart has stepped in to allow employees to take full advantage of the benefits of their super, their financial well-being, and other benefits on offer. To permit this, Wealth Smart offers a comprehensive programme of benefits for employees to use. If the business has casual employees, they will also be able to use this programme.

For those who are engaged in their own occupations, Wealth Smart can help them find the best superannuation for self-employed. So, you can protect your future just like any full-time employee who enjoys employer super benefits.

Casual employees can gain similar profits thanks to casual employment superannuation Australia. The Wealth Smart programme also increases the engagement of employees as well as loyalty within the organisation. Self-employed persons can discover superannuation thanks to Wealth Smart. This discovery ensures that self-employed people can protect their futures as effectively as other employees and employers. Wealth Smart offers:

  • Wealth Smart promises to offer financial education to assist employees in making better-informed decisions about their financial well-being. This education empowers the employees to take control of their personal super fund contributions and financial situation.
  • Sole trader tax information. When the sole trader seeks professional advice, the experts will educate them regarding super fund tax deduction benefits. Other advantages of the self employed obtaining professional advice including how to claim a tax deduction, obtaining a tax file number, taking advantage of tax deductions, and other advantages. Some of these advantages comprise before tax income benefits, after tax income benefits, and pre tax income information, together with knowledge of the super guarantee. The sole trader should then share this knowledge with their employees to make the most of the super fund contributions.
  • Product disclosure statement. It will also improve the reputation of the self employed business offering. And if the sole trader wants to seek personal advice, they will also become aware of each relevant product disclosure statement, enabling them to provide their employees with a better service.
  • Seek Professional Advice.Wealth Smart has ensured that its team of financial advisors can assist employees by offering needed financial advice. The financial advice covers topics like insurance, income protection SMSF, estate planning, and retirement planning.
  • Helpline Advice Service.Wealth Smart is a reputable service provider offering a toll-free dedicated number and helpline advice service to assist employees. This helpline can assist employees with queries and questions regarding financial matters.

Wealth Smart is sure to assist employers with their employees’ insurance concerns. Contact Wealth Smart at 1800 765 100 to get more information surrounding superannuation basics for employers and how to help your employees live a comfortable life post-retirement.

Superannuation For the Self-Employed 

The financial aspect of running a small business as a sole trader can be challenging. It would be best if you took care of your business and staff, amongst other expenses. Even if you have no team working for you, there are still financial obligations to take care of, like your retirement.

The differences in each business model can also bring a need for unique financial plans to ensure that you, as the owner, can retire with peace of mind. Make sure you have a secure retirement not just for your old age but also to cover you if the business runs into financial difficulties.

Some business owners may find that additional super payments and financial protection aren’t a requirement because they own the business and rely on profits alone. This way of thinking can be a detriment in the long run. 

Super Fund

Self-employed superannuation for small businesses has solutions for saving money. For example, you can save money to cover unexpected costs when you are ready to retire from your role as a small business owner. You will also make it easy for your staff to have a steady cash flow and retirement fund.

You can also use the opportunity to improve the overall payments you need to make for your business with tax and partnership fees. How much you contribute as a sole trader and when you start to contribute, differs. But you can determine these factors by the number of employees you have, the growth of your business and the outcome you desire for your retirement.

Let’s look at how self-employed superannuation for a small business owner can help secure any financial needs that may lie in the future.

What Is Superannuation for Small Business Owners?

Your financial status should be your top priority if you are an existing small business owner. Without a running income, you will have no business; without economic security, you will have no future. If you have chosen to employ staff to assist your business, you naturally add more responsibility to your load. 

Your first business point would be finding a system that works for you. Australians have many ways to supplement their retirement through Age Pension, personal savings, or the best superannuation for self-employed. These options are in place as financial management plans for retirement.

If you wish to move away from the standard method of obtaining a pension payout someday, you will need a change in your strategy. The system you choose must keep track of your profits, and you should have a reliable payroll system that records your superannuation contributions accurately. Educating your staff on why a super is necessary is something else to consider, and you want to make this process as smooth as possible. 

Superannuation retirement savings are compulsory funds you and your employees build up over your working lives. Super is a funding system the Australian government created to encourage people to have more financial independence without relying on the Age pension for their entire retirement.

Although the Age pension works well for those who do not have any other solutions, it is fast becoming the only way older people receive money when they are no longer working. This situation is where choosing the best superannuation for the self-employed changes the future of retirement. 

Superannuation Employer Contribution

Superfund contributions consist of payments made by the employer, which is usually a portion they deduct from the employee’s salary. The employee will then have to make additional contributions to the fund’s growth if they want to increase their investments’ balance and main benefits. Depending on the income level, the government might occasionally assist with contributions. Still, you would have to qualify for that through particular means.

The fund managers invest the super savings while the employee is still working. These investments will grow by attracting interest, creating the overall amount they retire with at the end of their working life. This fund is designed to encourage comfortable living without a financial burden on the government. Once the super is available to withdraw, you can use it however you choose. Whether for home improvements, a holiday, or simply to live comfortably, the choice is yours. 

Most Australians do not think about the money they might need in the future, especially in their early working lives. Without the correct information, you could miss out on the potential benefits of saving at a young age. The same goes for small business owners or self-employed people. The sooner they invest in superannuation for themselves and their staff, the easier it is to reap the benefits at the end of their working life. 

The more money you as an employer invest, the better your retirement and your staff’s retirement will be. Suppose you are self-employed and do not have a team. In that case, you can learn how to make the most of your retirement. You can also benefit from knowing how hiring potential freelance staff can help you to make your business and its financial benefits better. 

Choosing The Right Super for Your Employees 

As a self-employed person or a sole trader, you may be an employer. If so, you are obligated to your employees to ensure they have the correct super fund for their contributions as casual workers or full-time employees. There are significant benefits for eligible employees for full-time and casual employment superannuation Australia wide.

You need to assist them with understanding what the long-term benefits and short-term payment structures are. If they are unsure about the fund they want to go with, you will have to choose a default fund to pay into until they are ready to select a stable fund.

If you have staff working for you, take the time to understand your employee’s earnings and the appropriate personal super contributions amounts to their superannuation funds. Their contributions may be towards their savings, but it is still your business. Not taking care of these contributions may seem unnecessary. Still, you can be penalised for skipping out on payments or making short payments.

Super Contributions Payments

Any payments you make will go directly into that fund via electronic payment. Third-party payroll systems will need to acquire the information of employees before deductions for their super account.

You will need their tax file number and information about them to add to the fund application. It would help if you were particular about the information you provide to the third party. You can be held liable for penalties if the information is incorrect. 

You must keep a record of the payments and the information on how you arrive at the total deductions. Likewise, you should note everyone eligible for a super annulation account and list why certain employees’ eligibility criteria have not been met. You will also need to keep a record of their choices concerning their super fund choice.


If the superfund offers additional services, it may charge a service fee. The super fund may charge a service fee for giving financial advice to either you or your employees. They can also charge you for moving investments from one fund to another.

Not all funds do this, so check what all the costs entail and how often they will charge these fees. Not all these costs are necessarily transparent. So it is best to ask the fund advisor to give you all the fine print details before deciding on the kind of super funds you want to introduce to your employees. 

Standard Choice Forms 

You can assist with keeping a track record of each employee paying super and their contributions. It will also help keep a track record of all employees making personal super contributions and when they made them. You should also note all the employees who chose their fund and were sure of the benefits. 

Keep A Record of Information

These records will make it easy for you to call funds for additional information to offer your employees so they can get the most out of their investments. The funds that are more forthcoming with information are usually the ones you want to suggest to your employees.

The more details you can offer them, the easier it will be for you to make your super contributions without needing to move the funds between accounts. As a business owner, you should keep all these records safely for up to five years.

Employees Sacrifices 

Some employees may want to use the salary-sacrificing super arrangement as an option. If they choose this, they can add additional funds from their salary into their super as a “sacrifice”. This option is also known as pre-tax earnings. You should ensure their contributions are in addition to the money already paid towards the fund. You can keep a record of the super contributions through your payroll. 

Choosing On Behalf of Your Employees 

Some employees may trust you to make a choice when it comes to a super fund. It safeguards you as their employer to ensure you have done your due diligence in providing the details they need before making their choice. Older employees are likely to show more trust than their younger peers, and you will need to keep a record of this. Research has shown that up to 70% of employees prefer their employers to select the fund for them. As an employer, you must be sure of your choice. 


You need to check a fund’s performance by comparing the fund’s investments over the past five years. If you go for a balanced option, you must compare it to another flat option. Compare the payment percentage generally made to another balance account and if employees were likely to add personal super contributions to those accounts to increase their future performance.


Business owners or self-employed individuals should compare the fees they and their employees will pay to the fund. You should make this comparison across the board to determine the interest rates and the repayments when employees cash out at the end of their working life.

Check the fees each fund charges monthly and the fees it charges when you make additional changes. There is only one fund with low costs that favours employees, known as the Industry Super fund, but with lower prices come high return rates. Your staff might not find that favourable in the long run.


Insurance cover is essential when working towards your nest egg at the end of your working life. You want to be sure that you receive full coverage for anything that can happen when you are on the job or at home. The same will go for your staff.

You need to look at the kind of insurance and the superfund you choose for your employees. The fund insurance must cover the most important things a person needs while working full-time.

There are three types of insurance to choose from for your members: 

  • Death cover or life insurance 
  • Total and permanent disability 
  • Income protection insurance 

These insurance options are essential for employees who work in an environment with manual labour and are already of a certain age. Employees will benefit from insurance coverage even if they have only been with your business for a short time, especially if something happens and they cannot continue working. 

When you are looking for default insurance options, look for:

  • The amount of coverage they offer the contributor
  • The premium rates for the fund options
  • Anything that may affect you as the employer 

The default option is mainly for members who want to keep an eye on their super contributions without investing in a fund that a group of shareholders or board members manage. As an employer, you must pay into any fund. Additionally, the default insurance options will make it easier for you to stick to the rules of the Australian government without making your staff feel like they have little to no choice in what happens to their retirement.


It is wise to go through the options your staff will have as investments when they pay into a particular superfund. Certain funds allow you to choose the different asset types or direct investments from which the employee will benefit. If you are researching on their behalf because they have asked you to select a fund for them, then you should look for the following options: 

  • My Super
  • Growth
  • Cash
  • Balanced 
  • Ethical 
  • Conservative 

Suppose the superfund you have decided to go with doesn’t do what you expect in terms of performance. In that case, you should request a performance record from the fund managers as proof of the annual performance for a financial period. You should take this responsibility seriously, as the Australian Prudential Regulation Authority should test the fund’s performance.

Do You Need Personal Financial Advice? 

Super funds can be tricky if you do not understand target market determination on investments and how they can grow your money. Research has shown that up to 55% of people who retired between 2019-2021 had no additional income other than the pension they received from government contributions or Age pension. The age at which people are retiring has also gone down from 55 years to 65 years because there are no steady pension plans in place. 

These are the statistics you will need to consider when you open a small business or decide to work as a sole trader, self-employed, freelancer, or contractor. The retirement benefits will no longer be paid into an account by someone else. You must ensure that you are financially secure by the time you end your working life.

If you do not understand how the best superannuation for self-employed works, saving money at the end of your working life can be even more challenging. You could find yourself in the very place you do not want to be with no investments and reliant on the government for a pension. 

The idea that you might need personal financial advice and use someone to manage your money may seem costly and unnecessary. Still, when you think about not having any money to retire with and being reliant on the Age pension for the rest of your life, a financial advisor might not seem like such a bad idea. Let’s look at how personal financial advice can help you to make the right investment choices regarding your own super contributions.

What Do You Want to Achieve Through the Super Contribution? 

Exploring what you want from your finances is the first step to knowing if you need a financial advisor. You might not know about all the products out there, and professional advice regarding an industry super fund or tax matters for self employed people can assist you with making the right choice.

Professional advice from expert advisors looks at the bigger picture of the business and how you can grow your investments should you choose to make any. With their expertise, you can decide if full-time or freelancing employees will work better.

Expert insurance advisers can also guide you on the concessional rate if you need to contribute to each employee. Moreover, a financial advisor can help you look at your potential business revenue turnover and see how it can grow if you take on employees for whom you are responsible. 

Should You Hire an Advisor For Your Employees? 

Whether you employ people full-time or part-time, your super contributions will remain the same. Paying these into the right fund for your employees may change over time, and independent financial advice can help provide everyone with confidence.

With their portfolios and expertise, they should have most of the answers your employees need to decide on contributing the bare minimum or investing more substantial amounts.

Professional insurance advisers can explain to your employees why they should consider making salary sacrifices instead of just taking charge of their contributions, which can help you with taxes in the long run. 

Investment Products 

Even though a super fund is pretty standard, and you understand the basics of what the fund delivers, many investment portfolios can seem foreign to someone who does not understand money. If your employees are sure about the super fund you choose, you should consider their wishes even if you know their super fund is not the best.

Certain employees may feel comfortable making the decisions themselves because of bad relationships with previous employers and might not trust your suggestions. Enlisting personal financial advice services could put their minds at ease and help them make better investment decisions. A relevant product disclosure statement can explain how the products work and allow your employees to feel included in planning their retirement. 

The more products your employees are aware of, the more likely they will trust your judgment with their money. Even though the contribution is coming from you, it is essential to let the employees know what they are in for at the end of their working life. 

Should You Charge Your Employees for Financial Advisor Services? 

The simple answer is no. You have 60 days to pay over the contribution to the chosen fund after an employee starts work. Suppose you charge each employee for professional advice. In that case, making personal super fund contributions from their salary will become expensive.

So it would help if you gave indecisive employees the option of a default super fund account. Once you have a specific number of employees, you can arrange for an advisor to come in and speak to everyone and explain their options. 


Is There an Employer Superannuation Contribution Rate, And How Much Is It?

There is an employer superannuation contribution rate, which is 9.5% of the annual gross salary. The super contribution rate requires employers to pay according to quarterly due dates. Still, it can be paid within the usual pay cycle.

Is There Superannuation Employer Contribution Compulsory, And How Much Is It?

The superannuation employer contribution is compulsory and is 9.5% of the pre-tax salary at the time of publication.

How Can Employers Pay Their Personal Super Fund Contributions?

Super is often located in a clearing house via the ATO. The payments are usually made by payroll in the back of the office in most businesses. Any questions or queries surrounding the payment should be sent to the payroll agent. Still, Wealth Smart can assist you regarding this. If you feel that you have missing contributions, feel free to get in contact with us.

What Are the Benefits of Super Fund Contributions for The Self Employed?

One of the benefits of self employed superannuation is tax returns. There may not be a specific super fund into which you pay your contributions, but you are free to join any super fund you choose.

As self employed people, sole traders, contractors, or freelancers, you are responsible for making employee contributions even though you are not legally required to do so. All it takes is finding the best super fund for self employed for your retirement needs, hopefully for a higher lump sum payout. 

Your chosen super fund doesn’t have to be in your work industry. You can choose between paying more and less. But, there is a standard 10.5% that the self employed employer must pay for their employees. And you can choose to follow through with the same amount or add contributions over and above the minimum requirement. 

Sole traders can also make non-consensual contributions to the super fund up to $110,000. Still, even with that contribution, you cannot claim more than $27,500 in tax deductions. The money will still be taxed at your income rate but will be invested equally. 

What Is a Super Guarantee? 

A super guarantee is the minimum legislative amount you can contribute to the fund. As a self employed individual with employees, you can offer to pay an amount higher than the minimum for the benefit of your employees.

Still, they will have to be aware of this beforehand. You can encourage your employees to pay more than the minimum super guarantee contribution by using the fund benefits, so they understand the advantages of higher payments.  

Contractors are considered employees and will therefore receive the same employee contribution. As an employer, you will pay them for their labour the same as a full-time employee.

Contractors are still entitled to a super contribution from an employer even if they work for themselves. The contractor does not require an Australian business number to qualify for the employer to pay into a super fund for them. The requirements for payment would be: 

  • A verbal agreement for the work they are hired to do
  • Their skills are where the work outcome is not reliant on a specified result.
  • As a sole trader, you hire them for contract work, not a long-term employment agreement.

 However, suppose you are hiring the contractor through a company where they are a full-time employee. In that case, you are not responsible for the fund contribution. The contractor can choose their own super fund, and you will have 28 days to submit their forms. 

Freelancers will also be entitled to a 9.5% super contribution percentage for work done. Depending on how long the freelancer is employed, the 9.5% contribution will need to be paid for every quarter of employment. 

However, if the employer pays an additional 9.5% on top of the wage they agreed to pay the freelancer, they will not have to pay the 9.5% quarterly contribution to the superfund. 

Do Sole Traders or Freelancers Have To Pay A Super Guarantee For Themselves?

If you are running your business as a sole trader or a self employed person, you are not required to pay sg. This applies to small business owners who are also in partnership with someone.

Your contributions will be at your leisure, but you must check that your tax file number is registered when you make your payments. If your number is not registered, you will risk paying an additional 34% in tax without the benefit of personal contributions.

If you are eligible for a super co-contribution, you may miss out because you will have no trace of your funds’ payments. You will miss out on fund benefits and have difficulty tracking your super contributions because they won’t be as easy to find on the system. If you are using the services of an accountant or a financial advisor, you can ask them to keep track of your payments on your behalf.

What Are Personal Super Contributions?

Personal super contributions are the amounts you contribute after your tax has been deducted from your income. Think of it as a savings payment before you spend your salary. You can make those payments at your capacity by transferring the money from your bank account straight into your super fund. 

The benefit is you can claim a tax deduction on your contributions to your super fund up until age 75. You may be charged additional tax if your personal super fund contributions exceed the concessional super contributions cap for the specified tax year. Your contributions are not compulsory. You add extra savings to your retirement to increase any benefits your fund may offer based on the contributed amount. 

What Is A Super Co Contribution?

A super co contribution is a contribution paid in by the government to assist low-income earners with their super funds. The super co contribution amount is calculated after submitting a tax claim, after which the government can determine how much you earn and how much you pay the fund.

The government will contribute to the fund until a particular limit if you have made personal contributions. You cannot claim a co-contribution if you have claimed tax deductions for your super contributions. 

To qualify for a co-contribution from the government, you will need to receive at least 10% of your income from salary-related payments. You will have to have made a minimum of two payments into your fund in that same financial year. You must have paid this amount after making your tax deductions. You must also pass the two income tests, which are the income threshold and the 10% eligible income tests. 

A self-employed person or sole trader can only claim if they earn in the lower income bracket and follow through with the requirements. The same applies to contractors and freelancers who earn a minimum wage and contribute after tax. Co-contributions will not apply to self-employed business owners who have employees, irrespective of the amount they contribute as a business. 

Once the amount of your business revenue and contribution exceeds the average super balance and capped amount the government is willing to co-contribute, you will not be eligible for a co-contribution. 

What Percentage of Superannuation Should Small Business Owners Pay Themselves? 

The percentage of self employed superannuation you would pay yourself as a small business owner would be determined by your contributions. You do not have to pay a super fund if you do not have employees. However, if you, as a self employed person, operate your business under a business structure, you will have to pay yourself a super guarantee. The set rate for the super guarantee is 10.5% and gradually increases each financial year. 

When Should Small Business Owners Start Paying Into a Super Fund? 

Small business owners can start paying contributions for employees as soon as an employee begins to work at the business. This applies to all employees, whether on a part-time or contract basis. The payments can be made quarterly, with notable exceptions for domestic workers and employees under 18. 

As the business owner, you will have up to 28 days after the employee commences working for you to hand in the application form. Or you can give them the form to complete. If they work for you and the fund you have contributed to no longer receives your payments or if you have moved over to a different fund on behalf of the employees, you must submit change information. Again, these changes will need to be discussed with employees before deciding their choices as the fund benefits their retirement. 

Preparing To Retire from Self-Employment 

Calling it a day when it comes to retirement might not be something you are thinking of at the moment, but it has to be something you prepare for. Often retirement is a choice, but in some circumstances, retirement is unavoidable. The timing of your retirement could catch you by surprise, so adding to your self employed superannuation will always be something to consider. 

You can maximise your balance while you are still working by increasing the super contributions to your chosen fund halfway through your working life. Some choose to increase their contributions towards the end of their careers after paying their bond and their children are grown.

This plan can be beneficial when you have fewer monthly expenses and can afford to spend a little extra. For someone working for themselves and with no employer contribution, it is advised to start paying extra monies into their fund as a precaution. You will be saving on tax. You can plan a better retirement with enough money for yourself and your partner if you start contributing more at a younger age. 

There will be more opportunities to generate investment returns if you have a higher super balance. Your returns will receive compounding benefits where your investments return to your credit and continue to earn through those returns. Look at it as an investment avalanche; the more the investments return, the bigger the investment ball becomes. The ball can be seen as the balance of your super inflated by the compound returns on your investments.

Are Sole Traders Entitled to Superannuation?

Once you submit the employee forms, you have 60 days to make the first payment into the fund. The employee can then choose not to contribute to the fund, but you, as the employer, will have to pay into the fund. If they have not selected a fund, you must make payments into a staple fund until they do.

Small business owners can safeguard themselves by paying the superannuation contributions to the Small business Superannuation Clearing House as a precaution to meet their obligations. The Clearing House is a system that manages superannuation payments, reducing the time it takes to move money from multiple accounts into one account. It is a free service and aims to save money for small businesses when managing payments for numerous employees. There is a requirement to have less than 19 employees to qualify for this service, and the business’s annual income needs to be less than $10 million.

Sole traders are not entitled to mandatory contributions to superannuation. There is no safety net for sole traders responsible for their personal super fund contributions. As a sole trader, there are no obligations, and you do not receive a mandatory super guarantee. With many people starting their businesses or working as sole traders, this is seen as a flaw in the Australian retirement system.

Concessional Super Contributions

You can pay concessional super contributions and non-concessional contributions into any fund of your choice the same way you would pay it into an account for your employees. This method is still based on the benefits you want when you retire someday and not on the amount you are willing to pay each month. You should make concessional super contributions to a super account to secure your retirement, even if it is not required. 

There are ways that you can contribute more to your fund even though the prevailing amount is capped at $27,500 per annum. Using the carry forward unused cap rules, you can carry forward unused cap for up to five years if you have a super balance of $500,000 or less. You can also only do this before the end of the financial year. There is an age restriction, which you should check with your super. 

Concessional super contributions incur a tax of 15% for medium-income earners. For high-income earners paying tax, you will incur an additional 15% on top of the existing tax you pay. You might qualify for a tax deduction. Still, it can create unforeseen financial struggles if your business slows down and you cannot keep up with the financial strain of these concessional super contributions after your tax deductions. Fortunately, the Australian taxation office is always available with sound advice.

Claim A Tax Deduction

Personal concessional super contributions are not compulsory and can be made directly from your bank account. Once you have made the payment, you can notify your super fund and claim tax deductions for your contribution.

You can apply for your tax return when you receive confirmation from your super fund and have claimed a tax deduction on your contributions. You should consider this tax strategy carefully if you operate as a sole trader with no employees. A superannuation provider can provide expert advice regarding the most viable plan. 

Making Personal Non-Concessional Contributions Work as A Self-Employed Sole Trader

Understanding how non-concessional contributions work is as simple as knowing that you cannot claim a tax deduction for the contribution made. The purpose of making these contributions is to increase the amount of money you retire with at the end of your working life.

The increase in the wealth invested in the tax-effective superannuation is to receive concessional tax treatment on your investment earnings. This strategy might make you eligible for a co-contribution as a self-employed worker or a sole trader. You can contribute up to 65 years with a maximum cap of $110,000. 

Is It Better to Contribute to Super Before Or After Tax?

Sorting out your super can seem complicated when you are responsible for the payments as a self-employed worker, freelancer or sole trader. The super fund you contribute to will perform based on where the managers invest the money and tax prospects. Depending on your circumstances, you may want to consider both before-tax income and after-tax income options. 

Tax Deduction

If you contribute from pre-tax income, it is considered concessional. You will receive a tax deduction on the contribution, which is the concession based on the amount you paid towards the fund. These contributions are also before-tax contributions if you pay yourself a salary at the end of each working month. 

When the money you pay into your super is paid from after-tax income and uses money from your savings to pay into your super, it is called a non-concessional contribution. This choice means that you do not claim tax on the contribution. For example, if you pay $1,000 towards your fund and don’t claim tax, the total amount is available in your super fund. 

Suppose you pay the money into your fund before tax. In that case, avoiding the 21-47% income tax rate inclusive of the Medicare levy can be more favourable. Your circumstances will determine what you contribute and when because of the tax deduction. You are responsible for the payment, and you can decide what you would like to do as you are under no obligation as a sole trader, contractor or self-employed worker. 

The Medicare levy is compulsory for all those who have paid taxes. It’s a flat rate of 2% for all income taxpayers in Australia. It works towards helping the Australian public health care system. Only low-income earners with a taxable income of $21,655 per annum qualify for exemption from the levy. 

Saving Tax Using a Super Fund

As a small business owner, you want to try and save money despite the monetary obligations you may have. You have the added benefit of paying just 15% tax on your contributions towards your super fund if it is paid pre-tax. As someone who works for themselves, you do not receive employer contributions. Still, you can be exempt from certain payments if your income is below the required threshold. 

Suppose your spouse is unemployed or earning a low income. In that case, you can assist with insurance premiums and contributions on their behalf. Think about transferring your concessional contributions into your spouse’s super fund account.

You will save money and increase your returns if you pay less than 85% of your contributions for that financial year. This way, you can top up your spouse’s super if they have fallen behind and avoid penalties. You will also increase the wealth you invest into your super if you exceed your open contributions.

Three Ways to Save More in Your Super Fund

Suppose you are afraid of paying too little towards your super contribution. In that case, you may consider the following three examples of how you can turn your small contributions into significant investments.

  1. Make A More Significant Contribution as A Sole Trader 

As a sole trader, it may seem okay not to invest because you have the profits of your business to hold on to once you retire, but what if your business doesn’t make it? 

Take the cut in profits and contribute these to a super with growth potential, and you can monitor its performance. You can withdraw from it at the end of your business life and use the funds for other smaller businesses you can manage in retirement. 

Additional property may come in handy when you are older to use as an extra income if you cannot work. It would also be a significant nest egg to hand over to your children when they marry. Building a better home for you and your spouse in your retirement to make living easier can also be one of the ways you spend your withdrawals. You can also invest in home automation to make it safe for you to live in your home when you are much older and still want independence. 

Automation has become popular amongst the elderly, who may be too frail to care for themselves but can still communicate effectively. Your safety can be secured, and you can enjoy living in your old age with peace of mind. You will have your super balance, support a spouse and be guaranteed a sturdy investment when you retire. Depending on your money, you can also reduce your tax rate from a possible 47% deduction to 30%.   

  1. Be Hands-On 

Having your own business can be a dream come true, but when you look at the expenses, it may seem like a nightmare. Business owners sometimes hand their business responsibilities to staff and take a back seat to their duties. If you have few staff members, then you qualify for a co-contribution.

This co-contribution depends on how much money you make and the daily staff you employ. The fewer employees you have and the more work you put in personally, the more money you can contribute to your fund or your spouse. Employers who invest more time in their businesses save on the salaries and contributions they pay to super funds.

  1. Seek High Investments with Low Fees 

You must pay into a super for yourself as a business owner or a sole trader. Still, investing your money in a super with high returns and great compound returns for your business makes excellent business sense.

Suppose you retire and hand the reins of your business to one of your children and only play a role in the industry as a board member. In that case, you can use your investment returns to buy more control over your business. You will no longer be in control of the company’s day-to-day running. Still, you can ensure that the business you created is in good hands.

 Big Industry Super Funds  

There are currently 15 significant super funds in Australia. The majority of them are public offer funds that anyone can join. They are well represented on the Australian market, and you can switch funds anytime. Many members are in the fund, but that doesn’t make it better than others. It only means that more people decided to collectively belong to that particular industry fund making it more secure. 

The aim is to provide more significant benefits to a member in a particular industry where the fees are lower. It allows the members of the fund to collectively invest in a product saving them money while their investment grows. When you look at the number of members and the money they invest, they may seem cheaper to support. Still, on a global level, these funds are more expensive and can cost members a lot. 

What Is an Industry Super Fund?

Industry super funds are owned by the members and are not-for-profit super funds. Instead of paying profits to shareholders, these funds give money back to their members by offering them lower fees. This is a benefit for members who might not want to have their money in an investment portfolio where a board can benefit from the growth of their money. Unfortunately, having lower fees come at the cost of having higher investment returns if the contributions are made over a long term.  

There is no financial institution to carry the weight of the fund. The funds are there for the sole purpose of the member’s benefit and to avoid board members and industry costs to allow the members to control their contributions. It may seem like the members have more freedom to work with their own money, but the members are also responsible for the outcome if the fund does not do well. Industry super funds typically have the following features:

  • There are a lot of contributing members. 
  • The fees that members pay are much lower. 
  • The fund is independent of financial institutions.
  • Unlisted assets.
  • Most of the industry will have particular branding and marketing materials.
  • The performance figures are strong.


Who Can Join an Industry Super Fund?

The industry superfund was originally only available for members of the industry listed under the industry super fund. The members control the outcome of the fund within their industry, which has since become a public fund. This fund is the default fund for employees who do not know which fund they want. It gives members a lot of room to save money on fees. Still, the investment options are limited because no financial institution controls the stocks or shares of the fund. 

What Is Industry Super Australia?

Industry Super Australia is representative of the needs of the industry super funds. It is an advocacy body acting on behalf of the interests of industry super funds. It works in defence of Australian workers encouraging members or joining the industry super fund instead of a board-controlled retirement portfolio. 

Should Members Be Encouraged to Join an Industry Super Fund?

Any employees who are indecisive about choosing a super fund should consider an industry fund instead. Deciding on how they maintain their money can make it easier for small business owners to work on more critical matters. Members who join the industry super fund can also determine where they want to invest when they eventually decide to move over to a fund with a more steady investment portfolio,

Not having a board or a financial institution back up any of these investments also has a downside. There are no compound returns on contributions because there is no board to assist with acquisitions. Even though members save money with the prices they pay upfront, the money they get when they retire won’t reflect their hard work and investments. When the member retires, they will cash out the money they saved in terms of paying lower fees, but they won’t have a significant interest return to fall back on.

What Are the Downsides of Industry Super Funds?

Despite the freedom members of the industry super funds have, there are significant pitfalls for anyone who thought the industry fund was a better option. If contributing to the industry super fund is your only voice because of indecisive employees, then a financial advisor is necessary to help members understand their options.

To Conclude

Invest in the services of a financial advisor before you begin to make your contributions. Their advice is valuable for anyone who wants to increase the lifespan of their business and who wants to be independent of government pension contributions when they retire. You may not want to give up your business when the time comes and an advisor can help you maintain the majority share in your business until you pass on.