How does superannuation work?

As you are a self-employed support worker, you will need to think about your superannuation. If you don’t put money towards your superannuation, you could risk not having enough money when you retire.

For eligible employees, the minimum superannuation payable by employers is 9.5% of an employee’s ordinary time earnings.

When you work for yourself, it’s up to you to ensure you are provisioning for your retirement. You might like to periodically transfer a lump sum to your superannuation fund.

For example: during the first quarter of the financial year (1 July – 30 September 2016) Sally’s ordinary time earnings were $8,000

Therefore, using the super contribution guarantee as a guide Sally may want to transfer the following amount to her super fund:
$8,000 x 9.50% = $760

You can check out The Australian Tax Office’s guide to superannuation for the self employed for further advice and information.

 


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