All Superfunds, no matter which you choose, will have some sort of fee. Regardless of performance, fees are the major highlight in Superfunds. Understanding how these fees work and the difference they can make to your nest egg is vital.
To understand super fund fees, you must comprehend two key factors. The types of fees you are being billed and the fee rate you are paying. Opting for a super fund based on these two factors can see you retire with hundreds of thousands.
You should be aware of the various types of fees you are being charged. If you would like to find out the fees you are being charged, you should do two things.
Firstly, Google your fund’s product disclosure statement and scroll through to the fees section. You should see a list of different types of fees. What they are, how they are applied, and how often they will be incurred. Secondly, you should log in to your super fund account and note all the fees being charged to you. Investigate how closely these correspond and correlate with the product disclosure statement.
If you feel there are discrepancies, contact your super fund or financial advisor and ask for clarification. It is worthwhile researching and comparing the fees you are being charged against other super funds and what they charge.
Being complacent and not paying attention to your super is extremely irresponsible; the dividends you will receive later in life for being diligent now outweigh the burden of taking time to be informed today.
Another major factor contributing to how much you accumulate in your super account throughout your working life is the rate of fees you pay. Plain and simple, some funds offer much lower fees than others, creating a difference of hundreds of thousands of dollars when it comes time to retire.
Generally, funds are categorised into three groups; low super fees, medium super fees, and high super fees. You will need to weigh up your options and decide whether you want a fund that charges low, medium, or high super fees. While it seems like the best option to choose a fund with low super fees, these funds do not necessarily perform as well as medium or high-fee super funds, meaning you will not get as good of a return on your investment.
if you want to compare fees with a calculator click here
Superannuation for Contractors who run their own business and sell their services to others have different obligations to their super than what employees in a business may usually have.
A contractor (also known as an independent contractor, a subcontractor, or a subbie) who is paid wholly or principally for their labour is considered to be an employee for super purposes, and may be entitled to super guarantee contributions under the same rules as other employees.
A contract may be considered ‘wholly or principally for labour’ if: You’re paid wholly or principally for your personal labour and skills you perform the contract work personally you’re paid for hours worked, rather than to achieve a result
If hiring a contractor to perform solely their labour for a fee, the employer may also have to pay super contributions on their behalf.
In this sense, if you are a contractor who is being contracted to an outside business than your own to perform your usual work or labour, your employer must contribute to your super the same way they would any other employee.
This could be seen in an example of an electrician who runs their own small business, or is employed by a small business who has been hired by another business to supplement their workforce and perform a specific role that they can fit to.
Take, for example, an electrician who runs their own business and has been subcontracted by a larger business.
They are performing labour but also providing materials (i.e., themselves plus a toolbox plus a van full of PowerPoints and wiring etc.), they would be seen as a contractor and not an employee for super purposes. They must pay themselves super, in this case.
However if they are sub-contracted to perform labour only then the company that has sub contracted them may be liable to pay super on the amount that they pay to their contractor. This would be the case where the electrician just turns up with their tool box and everything else is provided by the "employer".
If they are in an employment-like relationship with the person that they entered their contract into, they may need to have their super paid to them by their contract employer. In order for super to be applied from what you earn, the contract must be directly between you and your employer. It cannot be through another person or through a company, trust or partnership.
It is important that both parties in the process are aware of their super obligations during the contracted period. There can be significant penalties for employers who use contractors if they fail to correctly pay super. Each case regarding contractors and super needs to be assessed independently to ensure that you are doing the right thing. There is no definitive black and white line between a contractor and a contractor in an employment-like relationship that can be obviously seen after all.
If you’re unsure about whether Superannuation for Contractors applies to your business as an employer, or are a contractor looking to make sure their super is being correctly paid into, speak with Australia wide tax solutions (AWTS) on 0488854200 or book here
Participants involved with the NDIS are assisted to live independently and plan out their ongoing future, including their home and living goals. The NDIS Housing in Superannuation can provide support to accessing housing for these individuals, but availability is often limited due to high demand.
Using your Self Managed Super Fund to invest in an NDIS property is a mid-to-long-term investment that could supplement your super to fund the retirement you want and deserve.
Having a self-managed superannuation fund gives you the ability to leverage your super by borrowing money from a lender to be able to make more sizable investment purchases, such as NDIS Property.
The rules and regulations around using your SMSF to purchase NDIS property can be quite complicated.
An SMSF can borrow money to purchase a house and land package as long as it is purchased together in one transaction (a one-part contract) as a single acquirable asset where the asset is identified up front as vacant land with a completed house on it.
There are specific considerations to consider to determine whether or not the investment property can be purchased through your SMSF.
Location & Demand
The property must be in an area with high rental demand (typically considered as anywhere within a 50-kilometre radius of an Australian capital city or a 35-kilometre radius of a major city).The areas generally fall into these areas and have a vacancy rate of 1% or below (meaning that the rental demand for investors is there).
The property purchased through your SMSF must be ideally as new as possible as it needs to be approved by the bank. This is because the property must be positively geared (income from the rent should be higher than the outgoings on the property). At the very least it should have a neutral cash flow (meaning the incomings and outgoings are relatively even).
No Personal Gain From The Property
The last criterion is that you can’t see any personal gain from your investment property. This includes:
Some risks can accompany using your SMSF (Self-Managed Super Fund) to invest in NDIS property – the number one is cash flow. Your loan repayments will come from your SMSF. Sufficient income into your SMSF (including NDIS Rent from the tenant/s) needs to be ensured to make the repayments.
Some ongoing costs can come with using your SMSF to purchase a property. These may include:
When you retire, there will be two options available to you with the property.
In short, using funds from your SMSF to purchase an NDIS investment property is not the same as a regular SMSF property investment loan. Doing so should consider guidance from professional advisers and careful planning.