While you’re a business owner, most of the time you’re focussed on looking after the business and caring for your employees. It can be hard to find time for you and your personal finances. But, it’s valuable to begin thinking about contributing towards your super.
Is there a legal requirement to pay yourself super?
This depends on the structure of your business. For example, if you are receiving a Pay As You Go (PAYG) wage, then you should be making super guarantee payments at least once a quarter.
If you’re a sole trader or in a partnership and aren’t paying yourself a wage, you generally don’t need to pay yourself super in the form of super guarantee (SG) payments. But you can choose to make personal contributions to boost your super.
Here are 3 benefits to contributing to your super:
1. Super can be a tax-efficient way to save and can help to reduce your tax bill
When you make personal contributions (non-concessional contributions) to your super, you could be eligible to claim a tax deduction for the contributions. This helps you save on tax and grow your super balance.
We’ve made it easy for Cruelty Free Super members to submit a personal contribution notice to claim a tax deduction. After you make a personal contribution, there’s a feature that will help you to claim the contribution on your personal income tax return.
2. You could be eligible for bonus money from the government
Depending on your circumstances, you could be eligible for bonus money from the government’s co-contribution scheme. The government has a scheme to match up to 50 cents to the dollar (capped at $500) for personal contributions. Read more about government incentives here
3. Starting early counts
Super is part of planning for the future, and sometimes this feels like a to-do item that is easy to de-prioritise. As employees have the super guarantee (SG), their super is automatically being taken care of. While they work, the magic of compound interest is working to grow their super balances.
While it may seem daunting to contribute to your super when you’re self-employed, it’s important to know that you still have the control of when and how much you contribute. You can choose to make a one off payment, or set up recurring contributions so to regularly build up your wealth. Our Personal Contributions feature makes this really easy.