When you’re self-employed, dealing with your superannuation often drops to the bottom of your to-do list. As a result, self-employed Australians are reaching retirement with 50 per cent less super than everyone else. Fortunately, there are some simple steps you can take to get your retirement savings on track, writes Peter Stanhope, co-founder at GigSuper.

While superannuation might seem like the least important thing on your list today, if you don’t do anything about it, the day will likely come when it becomes the most important – but often by then, there’s a good chance it will be too late to do anything about it. When it comes to saving money, the best time to start is now and that applies just as much to super as anything else.

If you’re struggling with super as a self-employed person, you’re not alone.

3 tips to supercharge your super

1. Automate your super savings

For employees, super is simple – their employer contributes super on their behalf every pay cycle, and the funds grow over time.

For self-employed people, it’s not quite as straightforward. As super contributions are not compulsory for self-employed people, a lot of sole traders wait until the end of the financial year and either contribute what they can on a last-minute basis or for some they do nothing, promising themselves they’ll sort it next year.

Automating regular super payments ensures that super is never forgotten and you’ll not be left behind when it comes to retirement.

Some self-employed focused superannuation products provide an additional non-super account that makes it easier to automate your savings. At GigSuper we call it the ‘Saver Account’. If the super product you’re using doesn’t offer one of these non-super accounts, then you can always set up a separate bank account that you can automatically deposit your retirement savings into weekly or monthly, then transfer it manually into your super at the end of each quarter or year.

2. Don’t leave tax money on the table

In addition to helping you achieve a retirement that befits the hard work and sacrifice you’ve put in over the years, superannuation can also help you legally reduce the amount of tax you’re paying. But to get the full tax benefits there’s an extra step that self-employed people can easily miss.

To have the earnings which you contribute to super taxed at the lower rate of 15%, versus your marginal tax rate outside of super (which can be as high as 45%) you need to go through the extra step of claiming that contribution as a tax deduction. It’s called an intent to claim.

To do this, after you’ve made the personal contribution, you’ll need to notify your fund that you intend to claim your contribution as a tax deduction.  With most funds you’ll need to complete a form called a Notice of Intention to Claim and send it to your fund, but others, such as GigSuper, allow you to automate this process.

Additionally, if your taxable income is under $54,837, we’d recommend checking out the government co-contribution scheme before you claim a tax deduction on your personal super contributions as you may be eligible for an extra super payment of up to $500.

3. Ensure that your insurance has you covered

If your current super fund is a legacy from a previous job you are probably also paying for one or more insurance policies through your super, such as life insurance, TPD insurance or income protection.

We’d recommend checking your superannuation funds insurance policy to ensure that you are still covered when self-employed. Different super funds use different definitions of ‘work’, and some funds don’t include self-employed work in their definition which can make it difficult in the event that you need to make a claim.

To check the insurance inside your super fund, find and download the insurance guide from their website and do a search for phrases like ‘self-employed’ and ‘sole trader’. Alternatively, you can also call your super fund and ask if they recognise self-employment in their definition of work. If they don’t, it might be time to look for a super fund that does.

Sorting out your super might seem like a big task, but small steps will get you there and now is the best time to start.

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