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Mel
16-01-2008, 05:33 PM
Hello out there Ive just arrived in Australia Sept 07. Superannuation what do you self employed people do about your super ?


Thanks People,s

Mel

Mrs HMS
16-01-2008, 06:16 PM
Hi Mel...welcome to Australia!

I'll preface this by saying I work in the superannuation industry so if you have some general questions I can answer them...however the law is very clear about what is general advice and what is specific advice and as soon as I can't legally answer your questions (without going through a whole heap of paperwork), I'll let you know.

Anyone can operate their own superannuation fund, they are retail products and there are literally thousands of them out there. The standard "employer" contribution to superannuation is 9% of income, as a self-employed person you can choose to regularly contribute a portion of your income or pay in lump sums on an ad-hoc basis (note not ALL funds allow ad-hoc contributions so shop around carefully). Self-employed people are not obligated to pay superannuation for themselves but everyone definately should!

As a self-employed person your contributions are tax deductible so long as you meet what is called the 90-10 Rule...that means that 90% of your income for the financial year must come from self-employment. This means that mostly newly self-employed people won't be eligible for the tax deduction in the first 12 months of operating their business (unless of course they start operating on 1st July).

Look at incorporating insurances within your superannuation also, it's cheaper! Most funds will let you have life and TPD (Disablement) insurance within the funds. Due to the tax deductible nature of the super contributions, it effectively means that you are paying your usually non-deductible insurance premiums with money that IS tax deductible.

There are so very many different types of funds out there that it can be extremely daunting. My strong recommendation would be to contact a financial advisor and let them assess your personal needs and goals and recommend the best product for you.

Feel free to pm me with any questions you don't necessarily want shown in the public forums and I'll do my best to assist!