Self Employed

A self-employed person is:

Am I required to register?

What is my contribution rate?

How do I pay?

How is my entitlement calculated?

What happens if I stop being self-employed?

Do I have to pay GST?

A self-employed person is:

  • A person who works either as a Sole Trader or Partnership (notwithstanding the fact that a Partner may receive amounts that may be called ‘salary’ or ‘wages’);
  • Is unincorporated, that is, the business does not have a “Pty Ltd” or P/L in the business name;
  • The person is not registered with ASIC (Australian Securities & Investments Commission); and
  • The person does not have an ACN number (only an ABN).

This definition is in relation to TasBuild’s requirements to be eligible for the scheme.

A self-employed person may or may not employ other people.

Am I required to register?

Self-employed workers, with active employer service recorded in Tasmania with TasBuild, can choose to register and contribute into the scheme on their own behalf.  In these circumstances the worker is able to add to their service record to accrue an entitlement. The self employed person registers with TasBuild and makes contributions.

Please contact us if you require any further information.

What is my contribution rate?

TasBuild will set a rate at which a self-employed worker can contribute into the scheme. The contribution rate will be reviewed annually.

The rate for the financial year 2016-2017 rate is $156.00 per quarter; this rate is based on a weekly wage of $720.00 at an accrual rate of 13 weeks after 15 years.

You have an option, as a self-employed worker, to contribute at a higher rate of $182.00 per quarter.  This rate is based on a weekly wage of $840.00 at an accrual rate of 13 weeks after 15 years.

Self-employed workers accrue their leave entitlement at 0.8667 weeks for every 260 service days, while a directly employed worker accrues 1.3 weeks every 260 service days.

How do I pay?

Self-employed workers will receive an invoice for the amount selected at the end of each quarter. Upon receipt of your payment, your service record will be credited with the applicable number of working days in that quarter, 65-66 days.

How is my entitlement calculated?

Employer contributions are paid out first and are based on the ordinary gross weekly rate of pay applicable prior to commencing employment as a self-employed worker. Ordinary gross weekly rate of pay includes applicable allowances, but excludes travel and fares allowances, overtime payments, casual loading, etc.  For information regarding applicable allowances please refer to the Do’s and Don’ts Checklist.

Where there has been an abnormal wage variation in employer contributions, either increase or decrease, during the accumulation period, this may have an impact on the ordinary rate of pay for the payment.

When the employer contributions are exhausted self-employed contributions will be refunded plus interest applied.

Interest will be applied to the contributions, compounding and calculated daily, that the self-employed person pays into the scheme on their own behalf. The interest rate will be set in late June each year for the following financial year based on the Fund’s earnings in the previous financial year. The rate for the 2016-2017 financial year will be 3.3% (previous rates for previous years are displayed on the Trustee’s website).

What happens if I stop being self-employed?

If you cannot continue for whatever reason, and have not yet qualified for an entitlement payment, you will be eligible for a refund of the contributions you have paid in on your own behalf. No interest will be applied if you have not qualified for an entitlement payment. If you opt for a refund of contributions prior to qualifying for an entitlement, you will not be able to contribute again for those periods for which a refund was obtained.

Do I have to pay GST?

Self-employed contributions are not subject to Goods & Services Tax (GST). Contributions made are not tax deductible by the self-employed worker as it is voluntary for the worker to contribute into the scheme and not compulsory under legislation*.

*Current taxation advice from TasBuild’s legal advisor and consistent with interstate schemes is that no tax is to be deducted from the self-employed component of the entitlement. The interest earned on contributions you have made for yourself is classed as assessable income. TasBuild will provide you with a statement upon receiving an entitlement which should be declared on your tax return.

This is general information only. TasBuild recommends you seek financial advice.