Sole traders cut back super, work longer hours

One in four sole traders has cut or cancelled super contributions to cope with rising costs, says specialist accountancy Hnry.

Most were also working extra hours and believed their work-life balance was worse than 12 months ago, according to a survey by the firm.

It showed sole traders were spending up to seven hours a week dealing with financial paperwork and tax affairs in the lead-up to the October 31 deadline.

“Sole traders have started to see the hard-won financial gains that were a crucial lifeline post-COVID start to plateau this quarter,” said Karan Anand, Hnry Australia managing director.

“With increasing inflationary and interest rate pressure, uncertainty in the economic outlook and financial admin taking them out of action for a full day every week or forcing them to find these hours late at night, it is no surprise that almost half of the self-employed - and vastly more women than men - are not contributing to their super.”

The survey found one in five men were cutting back super against almost a third of women.

“These pressures are compounded by the data that shows just three weeks out from the tax filing deadline, only 50 per cent have completed their tax returns.”

Sole traders were more pessimistic about the medium-term economic outlook than during the pandemic lockdowns and it was taking a toll.

“Mental health is a booming industry, unfortunately,” said one respondent.

Mr Anand said that the more than 1.5 million sole traders in Australia were key to the economy and needed to be supported moving forward.

“They (sole traders) are the engine room of the economy, dynamic and diverse,” he said.

“We also know that, overwhelmingly, sole traders consciously choose working for themselves because of the myriad positive benefits it brings: lifestyle, flexible working conditions, a chance to pursue their passion and choose their own future.”

“Most Australians are facing a tougher economic time at the moment and we really admire how the self-employed are pushing through. We are here to support them.”

The Hnry Sole Trader Pulse surveyed ABN-holders across Australia including contractors, consultants, freelancers, gig economy workers, and tradies.

Hnry is a digital accountancy service designed for independent earners. Founded in New Zealand in 2017 it expanded to Australia in 2020.

Josh Needs

24 October 2022

accountantsdaily.com.au