Superannuation Guide - Super for Self-Employed

There are significant tax savings on contributions by self-employed people. Learn more about which fund will suit you best.

Can I get super?
Yes, but there is no employer to make compulsory payments under the Superannuation Guarantee. So any super you arrange must rely solely on your own contributions, plus the increased value of the investments you choose.

So why do it?

Because, like employee contributions, there are significant tax savings on contributions by self-employed people. Check with the Australian Tax Office to find out the percentage deductions and the age limits that apply. Note – they change each year.

Deductions also depend on the percentage of your total income that comes from self employment. Check this out with your accountant.

Since 1 July 2007 self employed people can also access Government schemes such as the co-contribution scheme whereby the Government will contribute up to $500. Check the Australian Taxation Office web site for details.

Which fund is best?
You have a wide choice of possibilities:

  • insurance companies;
  • banks;
  • other financial institutions.

These are generally "public-offer" funds, which means they accept contributions from the public at large.

When you are choosing which fund to use, you should consider:

  • the administration fees;
  • the investment performance and the institution's reputation;
  • insurance cover options etc.

You can also do-it-yourself in a self-managed fund.

Can I get disability/death benefits?
You will need to get information about this from the fund, but in general you can pay an insurance premium to cover this. It should include benefits for total and temporary disability. Usually the premium is simply deducted from your account balance.

Can I choose the investments?
This is usually available in a public-offer fund, although changing investment strategies can involve an additional administrative charge.

Also your participation in this is usually limited. For example, you may be able to choose between stable investment or more risky international equities. The trustee makes the rest of the decisions.

My own fund?
You can set up your own fund, which is called a "self managed fund".

There are all sorts of pros and cons for having your own fund, including tax advantages, social security entitlements, investment flexibility etc.

The Australian Securities and Investment Commission suggests that you need to approximately $250,000 to justify the costs of running your own super fund. 

Make sure you get the advice of an accountant before you set up a self managed fund. For further information see our “Self-managed superannuation funds” fact sheet.

Last Updated – February 2014