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Growing your Super: Getting it right as a contractor

Published 17th June 2016

Being a contractor certainly has its perks. For one, you’re able to pick the jobs that suit you, in the regions where you want to work. What’s more, it’s easy to grow your skill set by working on a large number of diverse projects, sometimes in entirely different industries.

Australian IT contractors especially are in a good position, thanks to massive IT projects, like the national broadband network (nbn), continuing to expand across the country.

While opportunities are growing, however, contractors need to start thinking about the future. In Australia, this means understanding superannuation and how to grow it.

From you – and your employer

Superannuation is one of the best ways to develop a retirement income. In effect, it means saving a percentage of your earnings now so the money is available down the track. As a contractor, your super contributions will come from an employer and from yourself, if you feel you can add a little more.

If you have been paid wholly or principally for labour you’ve undertaken as part of a job, then you’re considered an employee for super purposes. This means you’re entitled to super guarantee contributions under the same rules as employees.

The minimum super amount will be calculated based on your ordinary time earnings. At present in the 2016-17 financial year, this is at 9.5 per cent.

Utilising Oncore Wealth Solutions

For a contractor, however, it’s always going to be a good option to bring in professional help to ensure there’s no management risk with superannuation. After all, super is crucial for retirement.

With Oncore Wealth Solutions, contractors can work with professionals to establish the best super fund for their specific circumstances. The Wealth team can also answer questions including how much to contribute, how much insurance is necessary and the most appropriate investments.

If you’re an IT contractor preparing to take on a number of jobs this year, then it’s time to start thinking seriously about where you stand with superannuation. By putting a strong plan in place now to prepare for the future, retirement will become a significantly less stressful prospect. Reach out to Oncore Services to learn more.