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HariSharma(Initiate)Initiate
23 Feb 2023

As a sole trader, can I pay myself wages and super using payroll?


I understand that this is not the usual practice and it is not required. However, as I have to process payroll for other employees every week and if I include myself as an employee- I can simply pay the tax as I am withdrawing money and also process the super together. I am using Xero for payroll processing and superannuation reporting and payment. This saves my time and also helps me avoid potential tax bill at the end of the f/y. This also means that I won't have to contact super after the end of the financial year to request a letter for a tax deduction.


What are your thoughts on this?

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WendyATO(Community Support)Community Support
26 Feb 2023

Hi @HariSharma,


Your understanding is correct you don't pay super guarantee for yourself. Being self-employed as a sole trader, you can choose to make personal super contributions instead. You would need to check with the superfund how this type of contribution can be made.


As for paying yourself a wage as a sole trader you are the business owner and not an employee of your business. You can't pay yourself a salary or wages and can't include yourself in payroll system. See information under salaries and wages.


You can enter into Pay as you go (PAYG) instalments voluntarily where you can make prepayments of tax on your business income earnt. By doing this you will then avoid large tax bill when you lodge your tax return.


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Most helpful reply

WendyATO(Community Support)Community Support
26 Feb 2023

Hi @HariSharma,


Your understanding is correct you don't pay super guarantee for yourself. Being self-employed as a sole trader, you can choose to make personal super contributions instead. You would need to check with the superfund how this type of contribution can be made.


As for paying yourself a wage as a sole trader you are the business owner and not an employee of your business. You can't pay yourself a salary or wages and can't include yourself in payroll system. See information under salaries and wages.


You can enter into Pay as you go (PAYG) instalments voluntarily where you can make prepayments of tax on your business income earnt. By doing this you will then avoid large tax bill when you lodge your tax return.


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Can I pay wage and super myself as a sole trader? | ATO Community