Superannuation Guarantee has been 9.5% since 2014. Given all that has been happening in the world with Covid -19 it may be easy to forget that this amount is about to increase.
The 2021 Federal Budget also announced that changes to the threshold that Superannuation Guarantee would be made.
Is your business ready for the changes and have you budgeted for increases?
On the 1st of July 2021 Superannuation Guarantee increases to 10%, this is up from the 9.5% employers have been paying since 2013.
If you are using an accounting software such as Xero or MYOB, the increase will automatically be updated for the increase. Your Xero Bookkeeper and or MYOB bookkeeper should be able to guide you in the changes. Budgets and cashflows will need to be increased by Superannuation Guarantee expense to 10%. The Superannuation Guarantee will continue to increase each year until it reaches 12% on the 1st of July 2025. Click here to see full details.
Table of increases
|Period||Superannuation Guarantee %|
|1 July 2021 – 30 June 2022||10%|
|1 July 2022 – 30 June 2023||10.5%|
|1 July 2023 – 30 June 2024||11%|
|1 July 2024 – 30 June 2025||11.5%|
|1 July 2024 – 30 June 2026||12%|
Currently if an employee earns less than $450 per month from one employer, the employer does not have to pay superannuation. This meant that some businesses could use the strategy of making sure casual and part time employee’s hours were limited so that did not go over the threshold of $450 per month.
The 2021 Federal budget has removed the $450 minimum threshold. If the legislation is passed in Parliament It is expected to come into effect on the 1st of July 2022. This means that all employees will be paid Superannuation Guarantee from dollar one. The amount it will cost a business from the 1st July 2022 based on $450 gross wage per month is $45 per month.
To see the full Federal Budget 2021 click here.
If you would like to discuss anything in this article or any payroll queries, please do not hesitate to contact your best Gold Coast Bookkeeper here.