Do I need to pay super if I work for myself?
There are times where you may be legally required to pay super, for example, a minimum of 11.5%1 of your salary from 1 July 2024:
- if you own a business with a company structure and Australian Company Number (ACN)
- if you pay yourself a wage.
If you’re self-employed or a sole trader with an Australian Business Number (ABN), you don’t usually have to pay yourself super.
That said, any super you pay yourself can help set you up for retirement.
Let’s take a closer look:
| Type | Do I have to pay super |
|---|---|
| I have a company structure with an ACN | Yes |
| I have an ABN with no company structure | No |
| I have an ABN and pay myself a wage | Yes |
| I have an ABN and am passing on work to another contractor | Conditions apply. Check with the ATO2 |
| I’m a contractor, paid for my labour, with or without an ABN | Conditions apply. Check with the ATO2 |
For more information about whether you need to pay super, visit the ATO.
Should I pay myself super?
Yes, but it’s your choice. Any money you contribute to your super now could make a big difference when it comes to retirement. That’s because your super earns compound returns over time.
Use our super projection calculator for an idea of what your future income could look like, with or without super.
A little now could be a lot later
Let’s look at an example3. Neelima works for herself as a freelancer and is 37 years old. She earns $97,000 a year before tax and has a current super balance of $85,000.
1
Balance at 67 with no extra contributions: $181,000.
2
Balance at 67 after paying 11.5% of after-tax earnings annually: $580,000.
3
Balance at 67 after paying 11.5% of after-tax earnings annually plus an extra lump sum of $5,000 a year: $813,000.
Every dollar counts when you work for yourself
Project your financial future
Watch your super grow
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How to boost your super
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Important information to consider
- Australian Taxation Office, Am I entitled to super?, ATO website, accessed 18 July 2024.
- Australian Taxation Office, Difference between employees and independent contractors, ATO website, accessed 18 July 2024.
- This case study is for illustration purposes only. The actual benefits you receive will depend on a range of factors including future economic conditions, investment performance and legislative change. Investment performance is not guaranteed. Source: AustralianSuper calculations June 2024. Gross earnings and lump sum contribution assumed to increase at 3.5% p.a. After-tax earnings based on 2024/25 ATO resident income tax rates plus 2% Medicare levy. Investment returns based on 6.5% p.a. after fees and taxes. Administration fee deducted from account balances of $52 p.a. + 0.10% p.a. of your account balance up to a maximum of $350 p.a. Nominal insurance premium of $500 p.a. All figures calculated in today’s dollars by discounting at wage inflation of 3.5% and rounded to nearest $1,000.
- Before adding to your super, consider your financial circumstances, eligibility, contribution caps that may apply, tax issues and when your super can be accessed. We recommend you consider seeking financial advice.
- AustralianSuper insurance is provided by TAL Life Limited (the Insurer) ABN 70 050 109 450, AFSL 237848.