Sussing out Super (for yoga teachers)
Posted by IYTA, 27-Sep-2018
Choosing between funds and working out super can be confusing at the best of times. So we sat down with Accountant, Amanda Rogers and Financial Advisor, Stephen Buhlman of WLM Financial Services to get the low down on what you need to know…
Q: Can yoga teachers charge studios and gyms super? (this is if they are contractors)
Contractors don’t normally charge their customers super. If there are any super obligations for the studios this should be reflected in the contract or employment arrangement you receive when you start working for the studio. There will generally be no super in the following circumstances:
- If you have completed a Statement by a Supplier not quoting an ABN stating your activity is a hobby.
- You are under 18 or you earn less than $450 per month from the studio
- You have set up a yoga business in a company structure and the company invoices the studio for your yoga classes.
- The studio has engaged you through an agreement with a labour hire form.
- You are paid under a Community Development Employment Program
If the studio has agreed or is obliged to pay you super, you will need to provide details of your superfund to the studio. The studio will provide you with a Standard Choice Form where you either nominate your choice of Superfund or elect to use the Employer nominated Default fund.
If you are a sole trader with an ABN you may be eligible to receive superannuation. Although you and the studio may perceive you as a Contractor the ATO may perceive you as an employee, especially if you are not allowed to get another yoga teacher to teach your class or you are covered by the studio’s public liability insurances, i.e. you are not personally liable in the event a patron injures themselves during a yoga class.
If you think you may be eligible for superannuation contact your studio or accountant first and then possibly the ATO Superannuation infoline on 13 10 20.
Q: Should super be paid monthly or quarterly?
With the adoption of Single Touch Payroll some employers have started paying superannuation monthly while others are still paying quarterly. By 2019/2020 all employees should expect to see super contributions being paid monthly to their superfunds.
Q: Are there funds which are better for yoga teachers?
The best superfund for you will depend on your age, your current balance in superannuation, your investment goals and appetite for risk. You can choose a Retail Superfund, an Industry Superfund or a Self Managed Superfund. If your super balance is quite low (less than $50,000) you may wish to choose a superfund with a lower cost structure (Industry superfunds and some Retail superfunds offer low cost MySuper accounts). A self managed superfund may be suitable if you have a significant balance in your superfund (greater than $300,000 ) and you wish to personally manage your investments either partly or fully or perhaps you might want to purchase a Yoga Studio through your Self Managed superfund.
If you are just starting out the employer nominated default superfund should be suitable and must be a MySuper product which will be a low cost superfund. The Fitness Industry Award 2010 specifies what the employer nominated default superfund should be and specifies the following Funds - AustralianSuper, CareSuper, Hesta and HostPlus.
Although Industry fund or MySuper products are low in cost, they normally invest in a passive manner to keep costs down versus an active investment style. Generally the more active fund manager should outperform their passive peers over an investment market cycle however this may come with more risk. So if your superfund balance is growing but not to the extent you think it should be, it may be worth contacting a Financial Advisor. Also check out www.moneysmart.gov.au
Q: Any particular super must-do tips for yoga teachers?!
- Your super balance won’t grow if you don’t make any super contributions.
- Generally, only have one super fund. The more superfunds you have the more costs. However sometimes people maintain two superfunds because of the insurances that one superfund may offer. Check with your financial advisor before consolidating your superfunds.
- Take advantage of the Government Co Contribution - If you earn less than $52,697 per year, the government can contribute up to $500 to your super account in a year.
- Take advantage of a Spouse Super Contribution. If you or your spouse earns a low or no income, the higher earning spouse may be able to claim a tax offset of up to $540 if you make contributions to the lower earning spouse's complying super fund. Check with your accountant if you are eligible.
- Click here to visit the ATO website for more information
Amanda Rogers (Chartered Accountant) and Stephen Buhlman (Financial Advisor) are both based at WLM Financial Services.