From 1 July 2021 the Super Guarantee rate rose from 9.5% to 10%, affecting employers and employees.
As an employer may be asking yourself, what does this mean for my business and employees?
Here’s the key considerations.
What is the Super Guarantee?
Quite simply, the Super Guarantee (or SG) is the minimum amount of Super to be paid to employees.
It is a portion of the employee’s wage that is paid from the employer into the employee’s Super fund on their behalf to hold until retirement.
Previously the rate that employers had to pay sat at 9.5% but has gone up to 10% since 1 July.
What should employers do?
– Firstly, ensure your payroll and accounting systems are up to date on the new super fund increase. If you don’t pay your employees the required rate of SG by the quarterly due date you may be required to pay a Superannuation Guarantee Charge to the ATO. To avoid these issues, update your existing payroll and adhere to the rise as soon as possible.
– Check which employees are eligible for Super Guarantee, as not all types of employees are. The ATO has a great tool to check which employees are entitled to SG – you can check it out here. Do your research to make sure the right employees get the right entitlements. You might want to double check this with your accountant, too.
– Through the COVID-19 pandemic your employees may have been receiving the JobKeeper payment while not in operation due to lockdown. As the employer, you were still required to continue the SG payments on the JobKeeper amount of $1,500 a fortnight. If an employee’s usual payment amount was less than this a fortnight, it’s up to you as the employer to decide to pay super on the additional money.
Where to go from here
Always keep an ear to the ground for major changes to superannuation. It’s important to know the correct amount your employees should be getting paid to avoid unwanted fees, charges and stress.
At the end of the day, you want to look after your employees and keep your business in the good books with the ATO. So when changes to your systems need to occur, don’t hesitate to do what needs to be done.
Ask for help
Are you late to the party and haven’t yet updated to the new Super Guarantee? Do you need help administering the changes or dealing with the ATO? Contact us for an initial chat about where you’re at. We’re happy to help.
The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.
