Sole Trader Super in Australia: What’s Required and What You Can Claim

Short answer: As a sole trader, you don’t have to pay super for yourself. The super guarantee is owed by employers to employees, and you aren’t your own employee. You can choose to contribute, and if you’re eligible, you can claim a tax deduction. To do that, give your fund a notice of intent and get its acknowledgement before you lodge your return. Deducted contributions count towards the concessional cap of $30,000 for 2025–26 and $32,500 for 2026–27, and are taxed at 15% in the fund. If a client pays you mainly for your labour, they may owe you 12% super guarantee even though you have an ABN.

The rules below are the ATO’s for the 2025–26 income year and the 2026–27 income year (1 July 2026 – 30 June 2027). They apply to anyone trading under their own name, not through a company or trust. If you’re still setting up, start with what a sole trader is. If you’re unsure whether a client treats you as a contractor or an employee, read contractor vs employee.

Do sole traders have to pay super?

No. No law requires a sole trader to pay super into their own fund.

The super guarantee is an obligation employers owe to eligible employees. A sole trader and the business are the same person, and the ATO treats money you take out as drawings, not wages, so there’s no employee for super to be owed to. That changes in two situations:

• You employ someone. You must pay them super guarantee of 12% of their qualifying earnings, and from 1 July 2026 it has to reach their fund within 7 business days of each payday.
• A client pays you mainly for your labour. You may count as their employee for super, covered below.

Nobody else is putting money into super for you, though, so retirement savings are entirely your job. Some sole traders match what an employer would pay, setting aside 12% of profit. That’s a benchmark, not a rule.

How do voluntary super contributions work for a sole trader?

You pay money into your fund from your own account. Then you choose whether to claim a tax deduction for it, which decides how it’s taxed.

	Deducted (concessional)	Not deducted (non-concessional)
Tax deduction	Yes, on your individual return	No
Tax in the fund	15% contributions tax	None on the way in
Cap it counts towards	Concessional cap: $30,000 (2025–26), $32,500 (2026–27)	Non-concessional cap
Paperwork	Notice of intent to your fund, acknowledged before you lodge	None
Government co-contribution	Not eligible	May be eligible on a low income

Either way, super is generally preserved: you can’t access it until you meet a condition of release, such as retiring after your preservation age. Only put in what you won’t need for the business.

How do you claim a tax deduction for personal super contributions?

Make the contribution, send your fund a notice of intent, wait for its acknowledgement, then claim the deduction on your return. The order matters.

1. Contribute to a complying super fund during the income year. Pay well before 30 June so the payment has time to reach the fund.
2. Check the age conditions. If you’re 67 to 74, you must meet the work test, or an exemption from it, to claim a deduction: at least 40 hours of work in a consecutive 30-day period in the income year. If you’re 75 or older, check that page before you contribute.
3. Give your fund a notice of intent. The ATO’s approved form is the Notice of intent to claim or vary a deduction for personal super contributions (NAT 71121). Send it to your fund, not to the ATO.
4. Meet the deadline. The notice must reach the fund on or before the day you lodge your return for that year, or by the end of the next income year, whichever comes first.
5. Wait for the acknowledgement. You can’t claim until the fund has acknowledged your notice. Once it has, you can’t withdraw the notice, though you can apply to reduce the amount within set time limits.
6. Claim it on your return at D12 personal superannuation contributions, not in the business schedule. The sole trader tax return shows where each part goes.

One trap catches people who change funds. If you roll over your whole balance to another fund, or withdraw it, before sending the notice, the notice isn’t valid, and you lose the deduction for contributions made before the rollover. Send the notice first, then switch funds.

How much can you contribute and deduct?

Your deductible contributions are limited by the concessional contributions cap, which covers all your funds combined.

Income year	Concessional cap
2024–25	$30,000
2025–26	$30,000
2026–27	$32,500

The cap includes any super an employer pays for you. If you also have a part-time job, its super guarantee contributions use up part of the cap first. Contributions over the cap have extra tax consequences, so check the ATO’s concessional cap rules before going over.

Carry-forward contributions. If your total super balance was under $500,000 on 30 June of the previous year, you can use unused cap amounts from up to five previous years. The oldest amounts are used first, and each one expires after five years. This suits sole traders with lumpy income. Say Mai, a freelance designer, contributed nothing in 2024–25 or 2025–26, and her balance on 30 June 2026 was $180,000. Her 2026–27 cap is $32,500 plus $60,000 of unused cap, $92,500 in total, plus any unused amounts from earlier years. You can see your available amounts in ATO online services under Super.

How much tax does a deductible contribution save?

The deduction saves you tax at your marginal rate plus the 2% Medicare levy. The fund then pays 15%, so the gain is the difference.

Worked example. Jack, a plumber, expects a taxable income of $110,000 in 2026–27. He contributes $10,000 to super in May 2027, sends his notice of intent and claims the deduction.

	Without the contribution	With a $10,000 deducted contribution
Taxable income	$110,000	$100,000
Income tax (2026–27 rates)	$4,020 + 30% × $65,000 = $23,520	$4,020 + 30% × $55,000 = $20,520
Medicare levy (2%)	$2,200	$2,000
Personal tax	$25,720	$22,520
Contributions tax in the fund (15%)	–	$1,500

Jack pays $3,200 less personal tax, and his fund pays $1,500, so he’s $1,700 better off overall. The money is locked in super, and his PAYG instalments won’t adjust on their own, so he can vary them if his tax will fall. The brackets are in sole trader tax rates.

Can a low-income sole trader get the government co-contribution?

Yes, if you make a contribution you don’t claim a deduction for and your income is low enough. For 2026–27, the super co-contribution pays up to $500. The thresholds are:

2026–27	Amount
Maximum co-contribution	$500
Lower income threshold (full amount)	$49,293
Higher income threshold (nothing paid above this)	$64,293

At or below the lower threshold, a $1,000 non-concessional contribution earns the full $500. Between the two thresholds, the amount reduces. At least 10% of your total income must come from employment or carrying on a business, and sole trader income counts. For that 10% test, your total income isn’t reduced by business deductions, so a low-margin year doesn’t count against you. There’s no separate application: the ATO works it out after you lodge your return.

Are you owed super by a client as a contractor?

Possibly. The ATO treats a contractor as an employee for super if the contractor test is met:

• you’re paid wholly or principally for your personal labour and skills
• you perform the work personally
• you’re paid for hours worked, rather than to achieve a result.

The contract has to be with you as an individual, and quoting an ABN doesn’t change the answer. Where the test is met, the client owes 12% super on the labour part of your invoices. From 1 July 2026, that’s calculated on qualifying earnings and must reach your fund within 7 business days of payday under Payday Super.

Example. Ben, a tiler, works on a builder’s sites, invoicing 30 hours a week at $70 an hour, all his own labour. That’s $2,100 a week, so the builder owes $252 a week into his fund. If Ben quoted a fixed price for a bathroom and supplied his own materials, he’d generally fall outside the test. Show labour and materials as separate lines on your invoices, so the labour component is clear. If super you’re owed doesn’t arrive, raise it with the client first, then with the ATO, which enforces the super guarantee.

…and where does Keel fit?

How much to put into super depends on what the business actually earned, and that’s the record Keel keeps. Keel: Invoice Maker & Receipts, by Ilura Technology OÜ, is an iPhone app for people who work for themselves. An accepted estimate becomes the invoice in one tap. Invoices are PDFs, and receipts, expenses and business mileage are filed under each job. Records stay on your iPhone, with no account, no bank connection and no cloud sync, and the App Store privacy label reads “Data Not Collected”.

Keel doesn’t calculate super or tax, send notices to your fund, or connect to the ATO. It’s free with no invoice limit, and free invoices carry a small “Made with Keel” footer. Keel Lifetime is a one-time purchase ($249.99 USD; the App Store shows your local price) that adds custom branding, a signature, premium templates and accountant-ready exports. Keel on the App Store. More Australian guides are in the Australia hub.

Frequently asked questions

Do sole traders have to pay super? No. The super guarantee is an employer’s obligation to its employees, and a sole trader isn’t their own employee. You can contribute voluntarily, and you may be able to claim a deduction. If you employ staff, you must pay them 12% super guarantee.

Can I claim my super contributions as a tax deduction as a sole trader? Usually, yes. Contribute to a complying fund, then give the fund a notice of intent (NAT 71121) before you lodge your return, or by the end of the next income year if that’s earlier. Claim the deduction only once the fund has acknowledged the notice. If you’re 67 to 74, you also need to meet the work test or an exemption.

What is the concessional contributions cap for 2026–27? $32,500, up from $30,000 for 2024–25 and 2025–26. It includes deducted personal contributions and any employer contributions, across all your funds. If your total super balance was under $500,000 on 30 June 2026, you may be able to add unused cap amounts from up to five earlier years.

Is super a business expense for a sole trader? Not your own super. Contributions for yourself are claimed as a personal deduction at D12 on your return, after your fund acknowledges your notice of intent, not as an expense in the business schedule. Super you pay for employees is a business expense.

Do contractors get super in Australia? Only if a client engages you as an individual and pays you wholly or principally for your own labour, for hours worked rather than a result. Then the client owes you 12% super on the labour component, even if you have an ABN. Otherwise, your super is up to you.

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This article is general information, not tax or financial advice. Consult a qualified Australian tax professional or licensed financial adviser.