Career

Everything You Need To Know About Superannuation If You’re A Freelancer

By Ranyhyn Laine
21st Nov 2022

Is your retirement on your mind? Yeah us neither most of the time, but it should be. What about if we put it this way: your superannuation is probably one of the biggest investments you will ever have and you could have more dollars to spend your retirement travelling, eating out and enjoying the good life if you play it smart. So have we got you thinking about retirement now? 

Here’s something else that might get you thinking about your super: the largest growing group of homeless people in Australia is women over the age of 55 and one of the reasons is that women retire with up to 48% less than men. 

If you’re a female freelancer, or you work for yourself, that statistic is even more worrying when you consider that you have to pay your own super. So how are you going to fund the retirement you want?

We spoke to the experts—Fleur Madden CEO of women’s jobs platform Freelancing Gems and Trenna Probert, CEO of Super Fierce, a superannuation comparison site with unbiased advice—to find what you need to know about making your super work for you if you are self employed. 

How should freelancers work superannuation into their rates? 

For many freelancers, bringing in revenue and paying their tax is their priority and often superannuation gets put on the back burner—but it shouldn’t. 

“Superannuation can seem like a luxury, or too hard when you are freelancing, but we encourage the freelancers on Freelancing Gems jobs site to be taking that 10.5% quarterly superannuation payment into consideration when pricing their jobs,” said Madden. 

We know cash flow in a small business can be tough, but adding your super into your rate before you discuss them with a client will ensure you are covered and you don’t have to add it on top. You can’t catch up on super later because the $27,500 tax free contribution cap is calculated annually, so even making small payments and building up to that 10.5% is better than making no contributions at all. Your future self will thank you, trust us.

Probert from Super Fierce agrees. “When you’re running your own gig, it’s up to you to take control. It isn’t compulsory, but it is definitely advisable. Super is a tax effective investment with extra benefits like the power of compounding interest—and what’s sexier than free money and having piles of gold to enjoy in your later years?” she says.  

Here are a few things Super Fierce says you can do today that will make a big impact: 

  • Detox your super: Make sure you only have one super fund. And if it is high in fees, then switch to a lower cost option that delivers good performance over time 
  • Pay yourself super: Think of it as an investment into your mental health today, and wealth health in retirement. You will be glad you did.
  • Get advice on contributions: Super isn’t a piggy bank for grannies. It’s a massive investment that can help you to save for a first home faster, minimise unnecessary tax today, and supercharge the value of your savings. 

What should freelancers be looking for from their super provider?

We’ve all got money invested for our future in one or more super funds. These funds are paid fees—by you from your super money—to invest and grow your money into a nest egg that will fund the future you want and deserve. So, you need to look for a fund that does all of these things:

  • Has low fees. Paying more doesn’t get you more, contrary to what you might think.
  • Can demonstrate consistent returns (growth) over more than ten years.
  • Invests your money in a way that you are happy with, whether that’s based on fees or ethical considerations. Regardless, it’s your money and you need to make sure you’re happy with how they are using it.

Sure there are super funds for specific sectors and industries—but that doesn’t always mean they are the best fit for you.

“At Super Fierce, we believe the most important things to consider are how much you’re paying, what performance they are delivering, and other things you may care about like insurance and investment options,” says Probert.

Madden also says that if you only have one main gig with one employer and you spend the majority of your working hours working for them, even if you are technically self-employed, the employer has a responsibility to ensure you have accounted for super in your rate, or agree to pay your super, so have that conversation openly.

“At Freelancing Gems, we want to make sure that our members are comfortable having financially-minded conversations and one of those topics is super. Superannuation for women is a conversation we are all having so that we see more women take responsibility for their financial future and women retiring with equal super,” she said. 

If you're looking for more tips, here's how to get paid what you're worth as a freelancer

Image credit: Urban List archives

Freelancing Gems is a digital jobs site for women looking for freelance, consulting, contract, part time, maternity leave cover, flexible remote roles. They also offer coworking days, masterclasses, business tools and templates and more to help you on your business journey. If you are an employer also check out Freelancing Gems to connect you with new talent today.

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