Self Employed Super Contributions – Here’s What You Need to Know
If you’re a business owner or self-employed freelancer, you typically always have a long list of things to do. Sales, marketing, admin, client support, bookkeeping – it’s a lot to juggle! When you add on paying your own super contributions to that list, it can easily be overlooked or deprioritised. But a word of wisdom – making self-employed super contributions may be a very wise and tax-effective way to give yourself a gift in the future.
Is it mandatory to make super contributions if I am self-employed?
The quick answer is, no – you don’t have to make super contributions if you are self-employed. It’s up to you to decide if you want to, how much, and how often you want to top up your superannuation account.
But it’s important to realise that it’s not just your retired-self that will reap the rewards of making these contributions now. If you are able to claim your super contributions as a tax deduction, that can be very tax-effective for you today. Usually, if you claim a super contribution as a deduction when tax time rolls around, it will attract a 15% tax. However most of the time, this is a lower rate than the tax applied to the rest of your income. You can determine your income tax rate by finding out what tax bracket you currently fall into.
So how do I actually make super contributions if I am self-employed?
There’s two ways we suggest. If you’re using accounting software such as Xero, MYOB or Quickbooks for your business, you might be able to make your super contributions quite easily through that system.
If you’re doing things a little more old-school, you can make your self-employed contributions in a couple of simple steps:
Contact your superannuation fund and ask what the best process is for making personal contributions, then make a personal contribution to your super fund account.
Complete a Notice of Intent to Claim form and send it to your super fund. That’s it!
How do I go about claiming deductions on these super contributions?
It’s a fairly simple process - you just need to be proactive. Once you have made a super contribution, you have until the rest of the current financial year AND the following financial year, to return your form. But remember, before you lodge your tax return you will still need to send the form to your super fund. Tip: Don’t forget to allow plenty of time for the form to be processed by your fund so you don’t get caught out by any unexpected delays.
How much can I contribute to my super?
When it comes to self-employed super contributions, it’s not quite a walk in the park and there are some important factors you’ll need to consider. Speaking to a financial adviser to help guide you through this process could be very helpful, especially if you are a little unsure about what it means for your personal finances or your business matters. The Lumaire team is here to help – book in for a chat with us today and take the first steps to getting your super sorted.
