Superannuation – to pay or not to pay? That is the question.
As Geelong accountants, we encounter many sole traders such as bricklayers and carpenters wanting to know the ins and outs of paying superannuation.
“Do I need to pay superannuation?”
“Should I pay superannuation?”
“If so, how much should I pay?”
“Where do I pay super?”
It is overwhelming – so overwhelming that many Geelong sole traders opt to ignore superannuation as the law doesn’t make you pay it!
Here are the facts:
No – you don’t ‘need’ to pay superannuation to yourself as a sole trader – only to your employees.
Should you pay super? Absolutely – you should be planning for your retirement as much and as early as possible. Paying yourself super is one of the most tax-effective ways to save for retirement.
There are situations that may arise where you may need to access your saved super such as if you were to permanently injure yourself at work, preventing you from going back to work. We, at NLA, advise you to plan for these unfortunate circumstances.
There are many ways to go about paying superannuation. Some people choose self-managed super funds, others choose APRA (Australian Prudential Regulation Authority) super funds. The difference between these options is that SMSF’s are managed by beneficiaries who are responsible for complying with super and tax laws, whereas APRA funds, such as CBUS, have thousands of members and comply by law for you.
Confusing? Contact Next Level Accountants to discuss your superannuation options that will benefit your future.