Changes to the amount employers pay and employees may additionally contribute to superannuation balances will change from July 1, 2021. Now is a good time to talk with your staff, check your employee agreements and prepare your payroll systems.
Generally, superannuation contributions must be paid for:
- an employee aged 18 or over who earns $450 or more (before tax) per calendar month**; and
- an employee under age 18 working over 30 hours per week, who earns $450 or more (before tax) a calendar month.
**Following the release of the Federal Government’s 2021 Budget, the $450 threshold is set to be scrapped by 1 July, 2022.
The superannuation guarantee contribution rate will increase from 9.5% to 10%.
The maximum amount an employer is required to pay superannuation based on employee quarterly earnings increases from $57,090 to $58,920 (from $228,360 to $235,640 annual maximum superannuation contribution base).
The concessional contribution cap increases from $25,000 to $27,500 (carry-forward of unused concessional contributions may apply).
What should you be doing?
- Check-in with your payroll software provider about the rate and maximum super contribution base changes.
- Let your employees know of this change. Your key messages should cover:
- before-tax pay may decrease in remuneration packages;
- individuals may want to review their additional after-tax or salary sacrifice contributions.
- Update individual agreements if you have agreed to pay more than:
- the minimum SGC rate of 9.5% with your employees;
- the maximum salary at which the SGC rate applies.
- As part of your end of year housekeeping, check you are up to date with all your employer superannuation obligations, not just for the current financial year.
Keep on top of your employer obligations. We’re ready to help. Contact our team to discuss further as needed on +61 3 9820 6400.