There’s a lot to think about when contracting. But setting up your super can be simple and could have lots of benefits.
You could save on tax, be eligible for free money from the government — and be building a better financial future for yourself.
Know your super rights
As a first step, it’s important to understand if the person paying you is actually your employer and must contribute to your super.
Hirers must pay super contributions for independent contractors if the contractors:
- are paid wholly or principally for their personal labour and skills
- perform the contract work personally, and
- are paid for hours worked rather than to achieve a result.
Don’t miss out on the benefits that come with paying your super
Contributing to your super as early as possible allows your savings time to grow, giving you a better chance of retiring with more money to live off. Even small contributions now can really add up over time.
Contributing to your super could also save you tax. You may be able to claim a deduction for your personal contributions made to a super fund, even if you earn part of your income as an employee.
If you don’t claim a tax deduction on your super contributions, you may also be eligible for up to $500 in money from the Federal Government as part of its super co-contribution scheme. Eligibility and how much you receive will depend on how much you contribute after-tax and your income. You can find out more about super rules and contracting at the Australian Tax Office’s website ato.gov.au
Membership of an industry fund like HESTA also has lots of advantages. HESTA members can access personal advice on their super at no extra cost. This includes advice on a contribution and investment strategy, insurance and super regulations and rules. To find out more go to HESTA’s super and contracting fact sheet at hesta.com.au/factsheet