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GigSuper Demo
Written by Peter Stanhope
on September 09, 2020

Superannuation is probably one of those things that you know you should be doing, but for whatever reason you just haven’t gotten around to sorting it out properly

Don’t stress. That’s why we’re here. 😀

One of the things we often notice when speaking to self-employed people is that the benefits of super are often hidden behind complicated financial jargon.

So let’s have a look at some of the great reasons to do super, explained in everyday language…

...and broken down into 3 main parts: contributing, investing, and withdrawing.



Financial jargon: “Concessional vs non-concessional contributions”

Plain English benefit: “Pay less income tax”

Let's start with the contribution part. You see, lots of self-employed people don’t realise they can use their superannuation as a nifty way to slash their income tax.

How? Well the superannuation tax rate is generally 15%, versus the marginal tax rate which is 34.5% for the average self-employed Australian. So by stashing some money into super, the average self-employed Aussie generally pays less than half the tax on that money.

We’ve got an example that explains more HERE.

But – and this is the important part – it’s not enough to just pop some money into your super. You also need to know how to then claim those super contributions as a tax deduction come tax time (which the GigSuper app will help guide you through).



Financial jargon: “Superannuation is a tax effective investment wrapper”

Plain English benefit: “Paying less tax means your money grows faster”

Once your money is inside your super, it's allocated to an investment portfolio that you choose. And regardless of what type of investments you've chosen, the money earned on those investments also gets taxed.

But the great thing about tax on the investments inside your super, verses the ones outside of your super, is that – once again – you're generally looking at paying only the 15% tax rate, versus your marginal tax rate.

So for most people this means the tax man takes less of the money that you’ve got sitting inside super. And by paying less to the tax man each year, you leave more growing inside those super investments.

Compounded over your working life, this can really make a big difference to the size of your nest egg.



Financial jargon: “Preservation age”

Plain English benefit: “Tax-free income in retirement”

Not only is super taxed at a lower rate, but when you get to retirement age and need to start making withdrawals, it’ll generally be tax free. Everyone’s financial circumstances are different, though, and it’s worth learning more about this on the MoneySmart website HERE.


Once you strip away the jargon, it becomes clearer to see how super means more than just ‘locking your money away’ until retirement.

You may also like:


Understanding superannuation when you’re self-employed

Everything you need to know (and do) now that you’re the boss  


How do I pay myself super now that I’m self-employed?

There are several elements to it. But it’s much easier than you think..  


How much super should I pay myself when I'm self-employed?

A guide to how much super will get you the retirement you want  

Join our community to discover how GigSuper can help you get your super on track.


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Example disclaimer

Alex is a fictional persona based on some typical attributes of a self-employed individual. Please make sure that GigSuper is right for your circumstances, even if your situation is identical or similar to Alex.

Figures are shown in today’s dollars, however they are not intended to be reflective of any particular investment option within GigSuper. These results are for illustrative purposes only and do not represent actual or expected returns that any particular investor might experience.

The projections are based on a number of assumptions, including but not limited to the following:

  • For both the super and non-super investment products an annual return of:
    • 2.37% capital gain
    • 4.88% income
    • 0.56% franking.
  • Tax rates on income and capital gains both inside and outside super remaining constant which may not occur.
  • A steady inflation rate of 2.5% which may not occur.

The prospective financial information provided is not a reliable indicator of future performance in that it is predictive in nature and may be affected by inaccurate assumptions, unknown risks and other uncertainties. Therefore, the prospective financial information may differ materially from the results ultimately achieved.

The above comparison in no way constitutes advice to invest in any particular investment product and we recommend you seek independent financial advice before deciding whether investing in super or non-super products is right for you.