Super contributions for sole traders: why, how much and how to claim

No compulsory super for yourself

The super guarantee is an obligation employers have to employees. As a sole trader you are not your own employee, so there is no requirement to contribute for yourself. Whatever ends up in your fund is what you choose to put there.

If you employ staff, or engage contractors mainly for their labour, you generally must pay super guarantee for them at 12% of ordinary time earnings from 1 July 2025, paid at least quarterly to their chosen fund. Missing it triggers the super guarantee charge, which is not deductible.

Personal deductible contributions

A sole trader can contribute to their own fund and claim the contribution as a tax deduction. The contribution is then taxed at 15% inside the fund instead of at your marginal rate outside it. For someone on a 30% or higher marginal rate that is a real saving, and the money grows in a concessionally taxed environment until retirement.

The trade-off is access: the money is preserved until you meet a condition of release, usually retirement after preservation age. Only contribute what you will not need.

The concessional cap

Deductible contributions count toward the concessional contributions cap, which was $30,000 for 2025-26. Check the ATO for the current year’s cap. If you have employer contributions from a part-time job, they count toward the same cap.

If your total super balance was under $500,000 at the previous 30 June, you may be able to use unused cap amounts from the previous five years (carry-forward), which lets you make a larger deductible contribution in a good year. Your fund or the ATO online services can show your unused cap.

The paperwork: notice of intent

This is where most mistakes happen. To claim a deduction you must:

• Give your fund a notice of intent to claim a deduction (the ATO form, or your fund’s version) stating the amount you intend to claim.
• Receive written acknowledgement from the fund.
• Do both before you lodge your tax return for that year, or before the end of the following income year if earlier.

If you lodge your return first, or roll the money to another fund or start a pension before the notice is acknowledged, the deduction is lost. Set a reminder for the day after you contribute.

Timing: received by 30 June

The contribution counts in the year the fund receives it, not the year you send it. A transfer made on 29 June can land on 1 July and belong to the next year. Contribute by mid-June to be safe, and keep the fund’s confirmation.

How much to contribute

There is no right number, but two anchors help. Paying yourself the same 12% that an employer would pay keeps you level with employees. And contributing enough to bring taxable income down to a lower bracket can be worth more than the same money left in the business account. Run the numbers with our sole trader tax calculator or with your accountant.

If your income is low, the government co-contribution may add to a non-deductible after-tax contribution instead; check the current thresholds. If your income is high, Division 293 adds an extra 15% tax on concessional contributions above a threshold.

Recording it

Categorise super contributions separately in your books; they are not a business expense on the profit and loss but a personal deduction on your return. Keep the fund’s receipt and the acknowledged notice of intent for five years. FlowFi recognises transfers to super funds so they do not get lost among other outgoings.