Superannuation Guarantee increase coming! From 9.5% to 10% – Are you ready?
From 1 July 2021, the minimum rate of Superannuation Guarantee (SG) will increase from 9.5% to 10%. The rate will increase incrementally by half a percentage point each year, up to 12% on 1 July 2025.
The change comes under the 2021-22 Federal Budget and aims to assist Australians in getting more savings into their retirement funds.
What does this mean for employers?
If you use an up-to-date payroll system that complies with Single Touch Payroll, these changes will be relatively simple to comply with as your program should automatically adjust for the rate change. Any new employees engaged on or after 1 July 2021 will also automatically be registered under these new changes.
Employers may need to consider how the rate changes will affect employee remuneration packages. For example, if an employee is receiving more superannuation they may now receive less take home pay to compensate for the increase in superannuation payments.
Business owners should ensure they are prepared for the change as non-payment, underpayment and late payments of as little as 24 hours are likely to attract attention and penalties from the Australian Taxation Office (ATO).
If you have any questions regarding the SG increase, or would like assistance in re-structuring your employee remuneration arrangements, please give us a call on 03 5443 0344 or email email@example.com