Keen to start a side hustle as a podcaster? How about a food photographer? Or perhaps you already have a side hustle and are crushing it. Wherever you’re at, it’s worth thinking about your super. Sure, super might not be at the top of your priority list, but setting up your finances could give you greater financial security.
If you have a part-time or full-time job plus a side hustle – what happens with your super?
If you work full-time, part-time or casually, you are entitled to superannuation. This means your employer should be making contributions (currently 12% of your earnings) to your chosen superannuation account. Over time, your savings will grow, and when you retire, you will have money you can access from your account.
However, if you have a side hustle (working for yourself), you will not receive any contributions on that income – unless you arrange for that to happen. While it’s not compulsory, adding as much to your super savings as possible can be a great idea. The longer your super is in your account, the longer the timeframe for it to grow.
There are two ways you can top up your super on the income from your side hustle:
Salary sacrifice
You can ask your employer to deduct some of your salary and put it into your super account as an additional form of saving into superannuation. This is known as salary sacrificing. For most, the portion of your salary that goes into your super is taxed at a lower rate than your regular taxed payments. Meaning you could pay less tax and boost your super savings at the same time – win! The extra amount you decide to move from your salary into your super account will depend on your income and the amount you can afford to put into your super. This option is tax-effective if you are earning more than $45,000 per year.
Voluntary contributions
Another way you can boost your super is by making voluntary contributions to your superannuation account – known as non-concessional or after-tax contributions. You can make lump sum payments or regular amounts from your pay into your super. You would have already paid tax on this money, so you don’t have to pay tax again. You may also be able to claim a tax deduction. You can contribute up to $120,000 each financial year.
Making voluntary contributions can also mean that you can take advantage of the First Home Super Saver Scheme (FHSSS), a government initiative that can help you leverage your super balance to buy a house and save on tax.
What’s right for you?
There are advantages to both salary sacrificing and making voluntary super contributions. Whichever option you choose, you’re investing in your future, while still keeping the income from your side hustle to spend or save however you like.
Need help? Our Super Specialists offer complimentary appointments, provide general guidance and can answer your questions about superannuation, investments or insurance.
This is general information only and does not take into account your objectives, financial situation or needs. Before acting on this information, or making an investment decision, consider whether it is appropriate to you and read our Financial Services Guide,, Product Disclosure Statements and Target Market Determinations. You should also consider obtaining financial, taxation and/or legal advice tailored to your personal circumstances before making a decision. This information has been issued by NGS Super Pty Ltd ABN 46 003 491 487 AFSL 233 154 as trustee for NGS Super ABN 73 549 180 515.
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Call us on 1300 133 177 if you would like to speak with us further, or you can discuss matters with one of our NGS Super Specialists, or an NGS Financial Planner.
