Yes, if you are a director of a Proprietary Limited ( 𝑃 𝑡 𝑦 𝐿 𝑡 𝑑 𝑃 𝑡 𝑦 𝐿 𝑡 𝑑 ) company and pay yourself a salary, wages, or director's fees, you are generally considered an employee of your own company and must pay Superannuation Guarantee (SG) contributions. The current SG rate is 12% of ordinary time earnings, payable at least quarterly.
Whether you must pay super for a director depends on the capacity in which the director is engaged and paid: If the director is employed by the company (for example, on a salary as CEO/Managing Director), SG usually applies to those earnings like any other employee.
As a sole trader, you aren't required to pay yourself a salary or make superannuation contributions. Your income is considered your business profit.
Superannuation contributions at a rate of 11% must be paid on director's fees. This ensures compliance with superannuation requirements.
You can grow your super by making extra payments yourself. Even small amounts add up over time, and voluntary contributions can reduce the amount of tax you pay. If you're on a low income, you may be eligible for extra contributions from the government.
To make a SMSF worthwhile, you need to consider your starting balance and the fees that will be incurred to manage it. There is no line in the sand where a SMSF is better than a traditional super fund. It all comes down to the set-up costs and ongoing fees, and how that compares to the returns that are made.
The most tax-efficient way to pay yourself as a director in the 2025-26 tax year is to take a low salary of £5,000, £6,500, or £12,570, supplemented by dividends, minimizing both personal tax and National Insurance liabilities.
Any contributions you make over the cap will be taxed at your marginal rate, less a 15% tax rebate. You may also be charged interest. At the end of the financial year, the ATO will give you the option to: withdraw up to 85% of your excess contributions for the financial year.
Most directors will choose to pay themselves a small salary from the business. In order to do this, the company must be registered with HMRC. And you'll need to ensure that any tax, national insurance (both employee and employer) is deducted and paid to HMRC.
The bring-forward rule enables you to accelerate your super contributions by using up to three years' worth of non-concessional (after-tax) contributions caps in a single year. This means you could contribute up to three times the annual limit in one go, or spread your contribution out over two to three years.
The penalty system:
Super Guarantee Charge – 200% of the original amount (on top of the original amount) Nominal annual interest which you will accrue until the SGS has been lodged, rather than until you have completed the payments. Administration fee of $20 per employee per quarter.
The maximum you can contribute is $300,000 or the sale price of your home, whichever is less. You may make more than one contribution, but the total must not exceed this maximum.
What Expenses Can a Company Director Claim?
Directors must avoid placing themselves in situations where they will or may have a conflict with the company's interests; particularly when it comes to utilising property, information or opportunity that they have obtained as a result of their association with the company.
Yes, the Board of Directors is structurally above the CEO; the board hires, oversees, evaluates, and can fire the CEO, setting major strategy, while the CEO manages day-to-day operations and implements the board's vision, reporting to them. The CEO is accountable to the board, which collectively holds ultimate authority for the company's governance and direction, even if the CEO is a member of the board.
In the organisation's super balance update, it found 2.5 per cent of the population have a super account of more than $1 million, as of June 2021. This represents 417,567 individuals, ASFA said, and is a 29 per cent increase from the 322,200 individuals who held over $1 million in June 2019.
Investment risk – Your salary sacrifice contributions are invested, and like any investment, they come with inherent risks. Depending on market performance, your super balance can fluctuate.
Five tips to boost your super
The optimum directors salary 2025/26 is £12,570 per annum. The reason for this is all down to the National Insurance (NI) rates. The lower earnings limit for NI in 2025/26 is £6,500 per annum. If you earn over this amount it will count as a qualifying year for your future state pension.
Deduct expenses
Consider paying yourself super, even if it's not required
If super's not a legal obligation, you might think it's insignificant. However, as most people will live in retirement for at least 25 years, it's important to have enough money saved up. How much you need will depend on your retirement goals.
Retiring at 60 with $500,000 in super is possible but challenging, depending heavily on your spending, lifestyle, and if you qualify for the Australian Age Pension. You might cover modest expenses using strategies like drawing down around $20,000 annually (using the 4% rule as a guide) plus other income, but it requires careful budgeting, potentially part-time work, and reducing living costs. A financial advisor can help tailor a plan, as $500k alone usually supports a basic to moderate retirement, not a lavish one.