Superannuation Explained for Contractors - Contractors Insurance Australia

September 29, 2015

Superannuation in Australia is a legislated way of forced savings for future funds. It means that we will have money available to us when we retire rather than rely on government assistance. However, as a contractor this is not something that happens automatically. It’s important for contractors to be aware of the differences between superannuation for employees and superannuation for themselves.

When you were an employee

If you are/were an employee, superannuation will make sure you have enough money when you retire. You generally won’t have to think about it too much, all you do is choose your super fund and hand the details to your employer to pay into. You may make some choices with your super fund as to how the payments are allocated and invested to maximise their future return, but on the most part it is a very easy process.

Your employer will put away about 10% of your pay into a superannuation fund on your behalf. This contribution has been set to rise to 12% by 2019. Employers are obligated to make contributions on your behalf, they are required by law to do so. Speak to your employer, or if you are an employer to ensure that the correct contributions are being made.

Contractor superannuation

If you work for yourself as a contractor, you are responsible for taking care of your superannuation. It pays to do a little research and check which superannuation fund will give you the most return for your dollar. The money in your fund should grow over time and you can still opt to make additional payments to boost the amount.

Many industries also have associated super funds which help people performing your work. However, do take note that even if you are a contractor, the person hiring you may still be required to make payments to your super fund if you meet the criteria for an employee. If you have any questions regarding this it is best to visit the ATO website.

As a contractor, if you employee anyone (such as an apprentice) you are responsible for meeting superannuation requirements for them. It’s important to understand your obligations as an employer to pay superannuation to your employees. Ensure you keep records of contributions and remember that there can be severe penalties for not meeting minimum requirements.

Superannuation can be complex at times so it is still important to speak to the ATO to make sure you are meeting all obligations, including providing your employees with access to information and resources.
At Contractor Cover we specialise in insuring new and existing contractor businesses. Contact us today or fill in our fast online form for an immediate insurance quote.

General Advice Warning – retail clients *

General advice on this website has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, please consider its appropriateness. You should also consider our disclosure documents, which include our Financial Services Guide (FSG) and Product Disclosure Statements (PDS) for some products.
*Retail clients are individuals or those purchasing an insurance product for use in connection with a small business where the product is a designated retail product (eg motor vehicle, home buildings, home contents, personal and domestic property, sickness and accidental and travel insurance). All other clients are wholesale clients.

We are a member of the Australian Financial Complaints Authority (AFCA). If you have a complaint and it is not resolved to your satisfaction by us, you have the right to refer the matter to the AFCA. The AFCA can be contacted at:

Mailing address
Australian Financial Complaints Authority, GPO Box 3, Melbourne, VIC 3001

Ph – 1800 931 678
Email –
Website –

Website By Cohesion Co.

Contractor Cover is a registered trading name of
Elliott Australia Group Pty Ltd
AFSL 418512
ABN: 81 153 685 922
© Contractor Cover – Insurance for Contractors in Australia