Superannuation for Self-Employed Tradies — How to Build Retirement Savings When No One's Chipping In for You

Here's the thing nobody tells you when you go out on your own — as an employee, your super just happens. Nine and a half percent of your pay disappears into a fund you barely think about, your employer matches the compulsory bits, and by the time you're sixty you've got a number in an account that you'll probably live on. It's not perfect but it's automatic. The second you become a sole trader — or start running your own trade business — that automatic system drops away completely. And if you don't build a replacement for it, you're setting yourself up to be working well past retirement age. Not because you love the tools. Because you have to.

I've met tradies in their fifties who've been self-employed their whole working life and have less than twenty grand in super. Twenty grand. After thirty-plus years on the tools. They've got a truck full of gear, a decent reputation, and absolutely nothing waiting for them when they can't physically do the work anymore. That's not a retirement plan — that's a trap.

The good news is, as a self-employed tradie you actually have more options for building super than an employee does. You just have to be intentional about it — because nobody's going to do it for you.

It's not laziness. It's cash flow. When you're a tradie, every dollar that comes in either goes to the tax man, the supplier, the subbie, or back into the business. Super feels like a luxury — something you'll get around to when jobs are consistent and the van's paid off. But "when jobs are consistent" never really arrives, because there's always another expense around the corner. New tools. A breakdown. A slow month. The BAS bill.

The other reason is that super is invisible. You don't see it leaving your bank account the way you see a supplier invoice or a fuel receipt. There's no pain involved in not contributing — so it's easy to kick the can down the road year after year until one day you realise the road's run out.

And look, the compulsory super guarantee only applies to employees. As a business owner, the government's not forcing you to put money aside. Which is great for your cash flow right now and terrible for your future self.

You've got three real options, and each one suits a different kind of business and personality.

Option one: treat yourself like an employee. Pick a super fund — industry funds are fine for most tradies — and set up a regular direct debit from your business account into your super. Even $100 a week adds up: that's $5,200 a year before investment returns, and over twenty years with compounding you're looking at well over $150,000. The trick is to automate it so you never see the money. What you don't see, you don't spend. Set it and forget it, just like an employer would.

Option two: make lump-sum deposits when you get paid on big jobs. This works better for tradies whose income is lumpy — you might do a big commercial fit-out that pays $40,000, then have three weeks of smaller residential work. Put 10% of every large payment straight into super before you touch the rest. The psychology here is important: you're paying your future self first, not giving the ATO or the supplier whats left over.

Option three: salary sacrifice through your company structure. If you're operating through a Pty Ltd company — or even a trust structure — you can salary-sacrifice into super, which reduces your taxable income. This is the most tax-effective approach but it needs your accountant to set it up properly. You're essentially paying yourself less salary and directing it to super, so you pay less income tax on it. Worth doing if you're in the higher tax brackets.

As a rough guide, the super guarantee rate for employees is 11.5% (rising to 12%). That's the baseline — if you're putting away less than that as a self-employed tradie, you're falling behind where you'd be if you worked for someone else. But the reality is most tradies running their own show should aim higher, not lower, because you've got gaps in your coverage that employees don't have — no sick leave, no annual leave loading, no redundancy pay. Your super needs to cover a bigger safety net.

A better target for a self-employed tradie is 15% of your net business profit. Not your revenue — your profit after materials, subbies, vehicle costs, and tools. If your business clears $100,000 after expenses, you want $15,000 going into super. That sounds like a lot until you realise the alternative is working until you physically can't anymore.

Don't overthink this. AustralianSuper, Hostplus, REST, Sunsuper — any of the big industry funds will serve you fine for the first few hundred thousand. The key things to look for are low fees (under 1% total), decent long-term returns (8-10% average over ten years is reasonable), and insurance options that actually make sense for a tradie.

On insurance — most industry funds offer automatic death and total permanent disability cover inside your super. For a tradie working with power tools, on roofs, in confined spaces, that TPD cover is worth keeping. It means if you get hurt badly enough that you can never work in your trade again, there's a payout that doesn't come out of your savings. The premiums come out of your super balance, so it's not costing you out-of-pocket.

One warning: don't let a financial adviser talk you into a retail fund with high fees and complicated investment options while you're still building your balance. You're not Warren Buffett. You need low-cost diversified investments — usually called "balanced" or "growth" options — and you need to keep contributing consistently. That's it.

Here's what I've learned watching tradies who retire comfortably versus ones who don't: the contribution rate matters way more than the investment returns, especially early on. Earning an extra 1% per year on your investments is nice. Doubling your contribution rate from 5% to 10% is transformative. You cannot out-invest a low savings rate. The tradies who end up with good super balances are the ones who made it a non-negotiable expense from day one — not the ones who picked the perfect fund.

Self-managed super funds get talked up a lot in tradie circles — usually by blokes who want to buy a shed with their super and call it an investment property. And look, SMSFs can work, but they're expensive to run ($2,000-$4,000 a year in accounting and audit fees), they're complex, and they're a terrible idea unless you've got at least $200,000 in super already. Before that, the fees eat all the benefit. Stick with an industry fund until you've got serious money in the game, then have a conversation with an accountant who actually understands SMSFs — not a mate at the pub who's "doing alright" with his.

Superannuation for a self-employed tradie is simple in concept and hard in practice. The concept is: put money aside regularly, invest it in low-cost diversified options, and don't touch it until retirement. The hard part is the discipline to do that when there's always a reason not to. But the alternative — working into your seventies because you've got no choice — is a lot harder.

Start today. Pick a fund, set up an automatic transfer for next week, and treat it like a bill that can't be ignored. Your sixty-five-year-old body will thank you.

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