Superannuation is important. It is a regular payment made into a fund by an individual towards their future retirement.
If you’re a contractor, sole trader or self-employed, then you probably already know that superannuation is just as important for you as it is for regular employees.
After all, if you don’t put some of your income aside now, you might not have enough money to live on when you retire.
Fortunately, it’s not that hard to manage your own super contributions – especially if you’re already in a good superannuation fund – and there can even be tax advantages for you.
Managing your own super contributions
There are two basic ways of making your own super contributions if you’re self-employed:
- If you pay yourself a wage, remember to also send at least 9.5% of your before-tax income to your super fund or
- If you pay yourself out of your business revenue, the majority of super funds will let you send a lump sum when your cash flow allows for it.
Sole traders, self-employed business people and contractors can contribute up to $30,000 per year and receive a tax benefit. And if you're 50 years of age or above, you can contribute up to $35,000 per year towards super.
For more information about voluntary super contributions, head to the page about contributing extra to super or speak to a qualified and registered Tax Agent.