I am a Sole Trader. How can I pay myself a wage / super!?

personal tax

As a sole trader there is no requirement to pay yourself a wage or super from your business. For tax purposes you and your business are considered one in the same. Therefore you can transfer money from a business bank account that you may or may not have setup to your personal bank account any time you like.

If you would like to pay yourself some super, you can do this at any stage too. Paying super for yourself as a sole trader is a good way to save for your retirement. Many self-employed people find they have very little money to live on in retirement because they haven’t paid super for themselves throughout the life of their business.
For an individual to be able to make tax-deductible super contributions, they need to be: wholly self-employed as a sole trader or in a partnership; or not employed; or, earn part of their income as an employee but earn less than 10% of their total income from work as an employee.

As a sole trader can I pay others a wage / super?
Yes, you can. This works in the same way that any standard employment arrangement operates. The wage to your staff member will be a tax deduction to your business just like any other tax deduction (see above “what deductions can I claim?”). The super will also be a tax deduction to your business. Super is currently 9.5% of total gross wages.

*Some of this information is taken directly from the ATO website and is provided here with the intention to be a quick and easy reference source for our clients.

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