How To Sort Out Your Super As A Freelancer Or Contractor

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If you take a long hard look into your future, what do you see when it comes to financial stability?

Superannuation is no joke, and, if you’re really committed to being a 70-something nomad cruising the east coast in a camper van, then now's the time to start getting smarter about your future finances.

Lifehacker has partnered with ING Bank (Australia) Limited (ING) to help you figure out this super business.

Sure, making contributions to super can be easier when you’ve got a steady employer who is paying you a consistent salary every month. But if you’re a freelancer or a contractor then here are the things you need to know:

You are not covered by the Superannuation Guarantee (SG)

Not having a legitimate boss generally translates to no SG. There are exemptions to the rule, of course, like if you’re contracting then your contract employer may pay you super as part of your remuneration – it’s always worth checking the terms and conditions of your contract. But if you’re a sole-trader who works from home, perhaps in their pyjamas, and has to wait for client invoices to be paid, then you’re responsible for your own contributions. Because if you don’t pay yourself some super, then no one else will.

Consolidation could be your friend

I used to pick up a new super account every time I started a new job (which was worryingly often). What I didn’t realise was that I was basically losing money by leaving little nuggets spread thin across seven different super accounts. If you haven’t looked at your super accounts, you should think about getting onto it. It can be quite easy and could save you a lot of money on fees & insurance.

Just a heads up before consolidating your super accounts – take a second to consider where future employer contributions will be paid, the other fees you may incur with the rollover, and losing your current insurance benefits from your existing provider(s) when the insurance is cancelled. It could make your life a lot easier in the long run.

You might be eligible for government stuff

Some self-employed people might be entitled to some bonus co-contributions from the big guys in Canberra. Co-contributions are exactly what they sound like; the Government will make a contribution into your regulated My Super or choice superannuation account. It all depends on age and income and current super status but you never know, it’s worth checking the ATO site here.

You can make super part of your business plan

If your business is an incorporated company and it employs you, then the company has to pay you the SG (9.5% of your income). But if you’re a sole trader or partner, it’s optional. That doesn’t mean you shouldn’t though. An easy way to guarantee life savings is just to factor it into your overall business plan, much like paying your taxes. Think of it as a life necessity and it will become far less overwhelming.

There is a super account out there for everyone

Treat your choice of super account like Cinderella’s shoe and find the one that fits, because there are a lot out there. Don’t take the decision lightly – every fund offers different investment options and benefits, and charge different fees.

This article was sponsored by ING (ING Bank (Australia) Limited ABN 24 000 893 292, Australian Financial Service Licence 229823) and written by PEDESTRIAN.TV. It’s also general in nature and does not take into personal circumstances, objectives or needs. Make sure you consider the appropriateness based on what you need and your financial situation. So speak to the experts before making financial choices, ok?


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