Super Tips for Sole Traders and Partnerships Before EOFY

If you’re self-employed—whether you run your own business as a sole trader or operate within a partnership - you’re probably used to wearing many hats. 

From managing clients and keeping up with invoices to handling tax obligations, the to-do list never seems to end. But as we approach the end of the financial year (EOFY), one important thing that’s easy to overlook is your superannuation.

Unlike employers, self-employed individuals aren’t legally required to contribute to super for themselves. That said, it’s a smart move to think ahead and give your retirement savings a little attention. Not only can it help you down the track, but it might also bring some handy tax advantages in the short term.

Why Make Super Contributions?

Making voluntary super contributions is one way to look after your future while potentially reducing your current tax bill. You can contribute from your after-tax income and - if you lodge the right form with your super fund - claim the contribution as a tax deduction. This lowers your taxable income and grows your super at the same time. Win-win!

Just keep in mind that if you claim the contribution as a tax deduction, you won’t be eligible for the government’s super co-contribution (more on that below).

What’s the Government Co-Contribution?

If you’re a low or middle-income earner and you make a non-concessional personal super contribution, you could be eligible for a government co-contribution. The government may contribute up to $500 into your super—no strings attached. The best part? You don’t even have to apply. The Australian Taxation Office (ATO) will assess your eligibility automatically when you lodge your tax return.

It’s a great incentive if you’re in a position to make a small personal contribution and don’t plan to claim it as a tax deduction.

What Should You Do Before June 30?

As EOFY approaches, now’s the perfect time to check your super is in order. Here are a few helpful tips:

• Make contributions early: Super funds need to receive your contribution before June 30 (or the last business day before it) for it to count in this financial year. Transfers can take a few days—so don’t leave it to the last minute.

• Be aware of caps: There are annual limits on how much you can contribute to your super. Going over these caps can result in extra tax, so it’s good to keep track.

• Check that your super fund has your Tax File Number (TFN): If they don’t, your contributions might be taxed at a higher rate and you could miss out on things like government co-contributions.

• Keep records: Hang on to contribution receipts and any correspondence with your super fund—especially if you're planning to claim a deduction in your tax return.

As a reminder, for amounts you intend to claim as a tax deduction you need to lodge a Notice of Intent to Claim form with your super fund. The acknowledge to this form needs to be received from your super fund before your lodge your Income Tax Return.

Looking Ahead

Super might not feel urgent today, especially when your focus is on running your business. But a little effort now can go a long way toward building a more comfortable future. EOFY is the ideal time to pause, plan, and make sure your super is working for you.

If you’re unsure about how much to contribute or what’s best for your circumstances, don’t hesitate to contact our office on (07) 3193 9455. We can help from both the tax and financial advice side. 

A quick chat could help you make smarter decisions for this EOFY and beyond.

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