Setting Up an SMSF: Costs, Fees, and Considerations

Hi, I’m Zoe Hadley. I’ve been working as an accountant in Australia for over 35 years, helping people from all walks of life small business owners, tradies, café owners, and families navigate the sometimes tricky world of finance. One question I get asked almost every week is:

“Zoe, how much does it really cost to set up a Self-Managed Super Fund (SMSF)?”

It’s a fair question. SMSFs promise control over your retirement savings, but they’re not free, and they’re not simple. I’ve seen people jump in with excitement only to realize they hadn’t thought about all the responsibilities, paperwork, and costs. So, let’s sit down and have a proper chat about this.

What Exactly Is an SMSF?

A Self-Managed Super Fund is a private super fund where you, and up to five other members, act as trustees. That means you’re in charge of making investment decisions whether it’s shares, property, or other assets.

The appeal is obvious: control. You get to decide where your retirement money goes. But here’s the thing with control comes responsibility. The ATO doesn’t play around when it comes to compliance, and as a trustee, you’re legally accountable for every decision, every payment, and every record.

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Understanding the Costs

Let’s talk numbers, because many people underestimate them. Setting up an SMSF comes with two main types of costs: the setup costs and the ongoing annual costs.

1. Setup Costs

To get started, you need to:

• Draft a trust deed (the legal document that sets up your fund).
• Register the fund with the ATO.
• Open a bank account for your SMSF.
• Appoint trustees, either individual or corporate.

Depending on whether you do it yourself or hire a professional, setup costs can range from $1,000 to $3,000. If you decide on a corporate trustee which I often recommend for clarity and easier succession planning—there could be extra fees around $500–$1,000.

2. Ongoing Annual Costs

Once your SMSF is running, it’s not “set and forget.” Annual costs usually include:

• Audit fees: $300–$600
• Tax return and compliance work: $1,000–$3,000
• Accounting software or admin services: $200–$500
• Optional financial advice or investment management: varies

So, realistically, you’re looking at $2,000–$5,000 per year to keep your SMSF compliant and well-managed.

Stories From Real Life

I’ve seen SMSFs work beautifully for some people and cause stress for others.

Take a couple I’ll call Jenny and Mark. They were running a small family business and wanted to invest in a property their business could use. They budgeted carefully, hired professionals, and kept their paperwork in order. Ten years later, their SMSF is thriving, and they’re thrilled with the control it gives them.

Now, contrast that with a young tradie who thought an SMSF would be a “cheap way to invest in property.” He skipped professional advice and didn’t budget for ongoing costs. Within three years, the fees were eating into his savings, and the stress was enormous. He ended up rolling his super back into a regular industry fund.

Lesson? SMSFs are amazing tools—but only when approached carefully and with the right guidance.

Payroll and SMSFs

You might be wondering: what does payroll have to do with SMSFs? More than you might think.

Over my 35 years in payroll services, I’ve seen many small business owners who want to contribute employee super into an SMSF. That means your payroll system must be accurate and compliant.

Here’s what that looks like:

• Pay wages correctly according to awards
• Calculate superannuation contributions accurately
• Withhold PAYG tax properly
• Report everything through Single Touch Payroll (STP)

I remember a café owner whose employees were being paid correctly, but their super contributions weren’t reaching the SMSF on time. When staff noticed, panic set in. Fixing it took time and effort, but it could have been avoided with proper payroll processes.

So, if you’re thinking about an SMSF, make sure your payroll and super processes are watertight. It’s not just numbers—it’s people’s futures.

Considerations Before Setting Up an SMSF

Before diving in, think about these key points:

1. Balance Size – Most experts suggest SMSFs are cost-effective with a combined balance of $200,000 or more.
2. Investment Goals – Do you want control over property, shares, or other assets? If a retail fund works for you, an SMSF might be overkill.
3. Compliance Responsibility – As a trustee, you’re accountable for ATO rules. Mistakes can be costly.
4. Professional Guidance – Even experienced investors benefit from accountants and financial advisers.
5. Ongoing Commitment – An SMSF isn’t set-and-forget. You need to review reports, make decisions, and maintain compliance every year.

Is an SMSF Worth It?

SMSFs can be worth it if:

• You want control over investments
• You have a sizable balance
• You’re prepared for annual compliance and costs

It might not be worth it if:

• Your balance is small
• You don’t want ongoing administration
• You’d rather a simpler, managed super fund

Advice From My 35 Years

After decades of working with Australians on super, payroll, and compliance, my advice is simple:

• Understand the true costs—setup, ongoing, and optional professional advice
• Get professional guidance—an accountant can save time, stress, and money
• Check payroll and super compliance if you’re a business owner
• Plan long-term—SMSFs are for retirement, not short-term gains

An SMSF can give you control, flexibility, and confidence but only if you’re prepared. Done incorrectly, it can be stressful and costly.Final Thoughts

Setting up a SMSF involves costs ranging from $1,000–$3,000 upfront and $2,000–$5,000 annually. But beyond numbers, it’s about responsibility, control, and planning for your future.

With the right advice, careful planning, and proper payroll and compliance systems, an SMSF can be a powerful tool to grow your retirement savings. Without preparation, it can become a headache.

After 35 years, I can say with confidence: knowledge, planning, and careful management are everything when it comes to SMSFs. Do it right, and your retirement will feel like a reward instead of a worry.