Super Guide for the self-employed, January 14, 2016 by Trish Power

Self-employed individuals are not required to set aside money to pay superannuation contributions. Self-employed individuals can still take advantage of the superannuation laws by making tax-deductible super contributions and/or non-concessional (after-tax) super contributions.

Such individuals can also take advantage of the co-contribution scheme, and/or can potentially take advange of the small business retirement exemption and other retirement-related incentives. For an individual to be able to make tax-deductible super contributions, they need to be: wholly self-employed as a sole trader or in a partnership; or not employed; or, earn part of their income as an employee but earn less than 10% of their total income from work as an employee.

The employee 10% income test applies even when an employer has paid Superannuation Guarantee on this employee-based income. If a self-employed individual has structured his or her business as a company however, then they must pay Superannuation Guarantee to eligible employees (including himself or herself).

Note that the 10% work test for making tax-deductible super contributions no longer applies from 1 July 2017 (see SuperGuide article Employees can make tax-deductible super contributions from July 2017).

Set out below are all SuperGuide articles referring to Super Guide for the self-employed.

Managing capital gains tax with super contributions

Q: I am about to make a capital gain of about $200,000 on an investment property I have owned for several years. My marginal tax rate is 32.5% and I am an employee, and 43 years old. I want to contribute the equivalent of the capital gain to my super (which is not a self-managed fund), so I can save some money for the … Read more

December 13, 2016 by Trish Power

Tax-deductible super contributions: Claim no more than your income

Q: If I make a personal concessional payment of $30,000 (tax-deductible) into my super fund and my personal taxable income for 2016/2017 is $20,000, are there possible tax penalties because I’m claiming $10,000 more than my taxable income?I suggest you chat to a registered tax agent, typically an accountant to … Read more

December 12, 2016 by Trish Power

Who can make tax-deductible super contributions?

Note: Taking effect from 1 July 2017, all eligible Australians under the age of 75 will be able to claim tax deductions for personal super contributions, subject to the annual concessional contributions cap. Such a measure will assist Australians who may be partly self-employed and partly employed, or individuals who … Read more

December 12, 2016 by Trish Power

Tax-deductible super contributions: Meeting the 10% income test

Q: I work for myself but I also have a part-time job. I have been told that even though I receive SG from my part-time employer, I can also make tax-deductible super contributions. Is that true? And if it is true, how does it work?Individuals who are self-employed, or who are not employed, are entitled to claim tax … Read more

December 11, 2016 by Trish Power 2 Comments

Co-contributions: Can I claim the tax-free bonus for the financial year that I retire?

Q: I’m aged 69 and I will retire in June 2016. Am I entitled to make a deposit into my super fund and receive the Government co-contribution for the 2015/2016 year?A: If an individual satisfies the age test, the work test and the income test relating to the co-contribution, then the individual should be eligible … Read more

January 14, 2016 by Trish Power

Co-contributions: Can I claim the tax-free bonus as a property investor?

Q: I am not working but I source my income from rents derived from my property investments. Am I able to participate in the Government co-contribution scheme?For an Australian to be eligible for the co-contribution scheme they need to be earning 10% or more of their total income from eligible employment, or from … Read more