• New Wave Accountants

Superannuation Plans 101: What Small Businesses Need to Know

As a business owner, it’s your responsibility to ensure your employees are well taken care of, including their salaries and benefits. One way to turn their job into a fruitful venture is by offering a company pension plan in the form of superannuation.

Superannuation can greatly aid your employees when it comes to their finances by creating a separate account for them so that their funds are deposited and can increase over time. Their pension plan usually doesn’t have any added tax so they can rely on it, especially during retirement or when it’s time to withdraw all their hard-earned money.

You can rely on a small business accountant to help manage your superannuation funds, so you can focus on running your business as usual. Keep reading below to find out why a superannuation strategy is just what you need for your small business.

The Basics of Super Contributions

While superannuation serves to help employees save their money, there is a yearly limit to how much money they’re allowed to deposit into their funds. Exceeding the limit can result in tax claims, so it’s important to stick to a specific amount to avoid paying debts.

The limits are categorised under concessional contributions, where the contributor faces corresponding tax deductions, and non-concessional contributions, where you’re free from paying tax. If you’re below 49 years of age, your limit is 30,000 dollars, but if you’re older than 49, you can contribute an amount that’s up to 35,000 dollars.

A non-concessional contribution is not influenced by your age and has an annual limit of 180,000 dollars. You can also choose to make advanced contributions that are worth three years, given that you haven’t gone past the limit in the previous years.

The Sole Purpose Test

There are rules regarding a super plan, especially if it involves self-managed superannuation funds (SMSFs), or money used for a chosen investment or insurance. One significant rule involved in superannuation is called the sole purpose test.

The rule states that the only purpose of the pension plan is to cater to the needs and provide financial aid to the employees involved, offering superannuation benefits to the members. They can either withdraw their savings during retirement or when something unexpected happens, and their beneficiaries have to take over.

The In-House Assets

In-house assets refer to investments, loans, or leases to employees and other members of the SMSF. The rule prohibits members from providing to a related party using the superannuation funds that amount to more than 5% of the assets in the fund.

Meanwhile, there’s still a possibility that a loan or investment of the employee can be regarded. If it’s below 5% of the total amount of the assets found in the super fund, it can be duly accommodated and presented to business-related parties.

The Opportunities It Provides

Through SMSFs, small business owners can acquire opportunities for the benefit of the company. It can allow you to gain business premises where the company is operating. As long as a market rental is accomplished, the superannuation fund can be used to finance the property if necessary.

If you need help distributing the funds of your company better, you can ask for the help of a business accountant. Since they have adequate knowledge concerning the policies of a limited recourse borrowing arrangement (LRBA), they can assist you in applying for a loan from a third party lender.


Both small business owners and their employees can benefit from the development of a superannuation fund. If you’re looking to consider a superannuation pension plan, you will need the assistance of a business accountant to help you and your employees manage your savings


Are you looking for a company accountant in Queensland to help you put up your superannuation plan? New Wave Accounting is dedicated to helping small businesses by offering accounting and bookkeeping services. Get in touch with us today to schedule a free strategy call!

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