Understanding superannuation when you’re self-employed

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

Tackling the thought of dealing with your super can often be the proverbial can that keeps getting kicked down the road.

But you’re here (yay!) which means you’ve probably reached a point where you just can’t ignore it any longer.

So first thing’s first, big high five for you!

Whether you read a news article and wanted to find out more.

Or a trusted advisor has given you the nudge.

Or maybe you just have a nagging feeling like you’re falling behind....

If you’re self-employed and have no idea where to start when it comes to your super, you’re in the right place.

In this article we’ll cover everything you need to know about your superannuation now that you’re the boss.

Let’s shake that “ugh...super” feeling and get you back on track.

How the Australian superannuation system is designed to work (in a nutshell)

It may come as a surprise (or perhaps not), but saving for the future is not an in-built human trait.

In fact, science shows that our brains are actually wired to treat our ‘future selves’ like complete strangers. This means that we’re pulled to act as if our future self is someone we don’t know very well. And even someone we don’t care about much.

Which can make saving for retirement, a bit of an issue. One that the masses used to ignore, leaving too many people dependent on the government pension and struggling in retirement.

So how do you make sure that an entire working population re-wires their thinking around saving for retirement?

And not just that, but how do you teach everyone to save cost-effectively and give them the investment smarts they need to make the most of their money?

One way is…you don’t.

(Stay with us, it’s actually a pretty great strategy.)

Instead of attempting to educate millions of people, and have everyone at different levels trying to master their own retirement finances, the Australian government decided to relieve the masses of that burden.

They placed the responsibility, instead, on a much smaller (and more manageable) group – employers.

That’s why you can show up to a job, tick a box, work with that employer your entire career, and likely have a very solid stash waiting for you when you retire.

If you have a few employers during your career, the same principle applies.

Tick a box with each one, they’ll take care of the rest, and again you’re very likely to end up with money when you’re old (in this scenario you’re probably paying way too many fees, but we’ll talk about that another time).

So you see, the superannuation system was designed to try to make sure that all people — not just the very wealthy — could have enough money to live comfortably once they reach an age where they can no longer work.

Not a bad system at all.

Super for employees vs self-employed people...what’s the difference?

If you’re an employee, here’s the gist of what the employer (i.e. someone with finance smarts and tools – like the payroll department or the accounting team) and the super fund take care of on your behalf:

  • Making sure your money is going towards your retirement — so you’re automatically saving the mandatory 9.5% of your overall salary (or more in some cases) and it’s being properly handled in your name.
  • Making sure your super money is taxed at a concessional rate — so you generally pay less tax at the end of the day than if you were stashing your retirement funds into a bank account.
  • Making sure your super money is invested in diversified portfolios — so you have the best chance of saving as much money as possible for retirement.

Yup. All of that is done for you.

So if you’re like most people, you (maybe) give a passing thought to your super balance once a year at tax time when that chunky envelope from your super fund arrives in the post.

And the money sitting in your super fund feels only vaguely connected to your actual work. Even standard employment contracts often position what you earn as salary PLUS super.

No wonder so many people think about super as ‘extra money’ that doesn’t really belong to them.

But when you’re self-employed, things are a little bit different.

When you’re the boss, the finance stuff that happens automatically for employees all falls to you.

Things like paying yourself a wage, sorting out your income tax, saving money to take leave and, you guessed it, managing your super.

The problem is, most self-employed people don’t have a finance background. They’ve never been trained or taught what to do and they don’t have the tools and experience to nail it straight outta the gate.

PLUS, small business budgets can be brutal (especially when you’re starting out). Keeping the cash flowing and paying all the bills on time feels more urgent than saving for a future that feels a long way off.

AND making contributions to your super when you’re self-employed is generally voluntary.

Leaving way too many self-employed people to either get their super wrong, or just lump it in the ‘too hard’ basket and do nothing about it.

So despite a lifetime of hard work, most self-employed Australians will struggle to achieve a comfortable retirement.

But not you!

Because you’re here. And that’s already the first step to getting it sorted.

Let’s dig into what to do next…

How to get started with your super when you’re self-employed

What no one really teaches you, is that your superannuation isn’t just about having money when you’re old.

It’s also about being smart with your business and personal finances every year.

And once you have that “Aha!” moment, it’s so much easier to tackle this thing...even if you’ve been putting it off for ages.

Starting with…

1. Realise that superannuation is about your worth

One of the biggest things people first grapple with when they go out on their own is how to set the right pricing.

Whether you’re selling a product or a service, chances are you’ve struggled with finding the right balance between earning a decent profit and having competitive pricing.

However, even if you’ve landed on a comfortable price – replacing the money you’d be earning if you were an employee – you probably forgot to factor in your super.

Don’t worry. It’s not your fault.

We’ve been conditioned to think about our super as money that’s separate to what we earn. Once again, even standard employment contracts usually position what you earn as salary PLUS super. Like some strange ‘employer money’.

But it’s never too late to realise that super was always your money. And it can be now, too!

Because if you’re not factoring it into your pricing, you’re instantly discounting yourself – your time and expertise – by 9.5%.

And if that feels like a big increase to make to your prices straight away, the good news is that flexibility is on your side.

How much you choose to save into super is up to you, the idea is just to start and tweak it as your income grows.

Who knew super could give you great bargaining power next time someone is fishing for that 10% discount – just say "Would you like me to do that at the expense of my retirement?" and watch them squirm.

2. Find the right super fund for you

Now that you’ve reframed your relationship with your super, you’ll need to decide which super fund is right for you.

The one (or *cough cough* three 🙈) you were lumped with when you were an employee might not be the right match for you anymore.

If you still have a super fund from your old government job, they may not even be able to take your contributions as a self-employed person.

So it’s time to do a bit of digging.

3. Use a practical 3 step process to pay yourself super (it works with any fund)

Understanding there’s something in super for everyone – regardless of what stage of business you’re at or how much you earn – is one thing.

Taking the right steps to get the most out of your super is another.

But you’ve got this!

Just like all the other bits of your business that may have been overwhelming at some point, you’re about to master this one, too.

Everything you need to know about how to pay yourself super when you’re self-employed is IN THIS BLOG POST.

The quick version is this:

  1. Set up a bank account dedicated specifically to your retirement savings and save a regular amount into this account, knowing you can dip into it if your income fluctuates.
  2. Once a quarter, transfer the money from that account into your super to really give it the chance to grow.
  3. Don’t forget to claim your contributions as a tax deduction (and check if you’re eligible for the Government Co-contribution).


Stop paying too many fees. Bring all your super together into one fund and let the wonders of compound interest grow your nest egg.

Read all the nitty gritty details HERE.

Make a start today

Sorting out your super when you’re self-employed – especially if you’ve been ignoring it – can be a lot to tackle all in one hit. But you’re already on your way to getting it done.

And the good news is, GigSuper is purpose-built for self-employed people.

Which means:

  • You can sort it out in less than 15 minutes (our fastest member did it in just 8 minutes).
  • You can use our guided tour to automate everything (so the tricky parts are taken care of for you, just like they would be if you were an employee).
  • You can start saving from as little as $10 a week, and work your way up as your income grows.

Ready to get started?