Compliance alert for employers
It is important to ensure that you are paying your employees the correct entitlements, including the correct superannuation contributions. With the commencement of certain legislative changes this new financial year, now is the time to review your obligations regarding compulsory superannuation payments as a matter of priority.
Super Guarantee Increase
The super guarantee refers to the proportion of wages that employers must contribute to their workers' retirement savings. The minimum super guarantee is calculated as a percentage of each eligible employee’s ordinary-time earnings to a complying super fund or retirement savings account.
The super guarantee is legislated to increase half a per cent a year before reaching a final value of 12% by 2025. From 1 July 2022, employers need to ensure that they calculate the minimum super guarantee for their employees at 10.50 %.
Minimum Threshold Removal
The scope of people who are eligible to earn be paid super has now increased.
Prior to 1 July 2022, people who earned less than $450 per month from the one employer were not entitled to receive the super guarantee. Now, in accordance with the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act, employers are required to make super guarantee contributions to their eligible employee's super fund regardless of how much the employee is paid. Employees must still satisfy other super guarantee eligibility requirements.
The removal of the $450 minimum threshold particularly impacts employers of casual or part-time employees.
Employers should review and update their payroll and accounting systems to ensure their employees’ super guarantee entitlements are calculated correctly.
Stapled Super Funds for Employers
From 1 November 2021, if you have new employees start and they don't choose a super fund, you may have an extra step to take to comply with choice of fund rules. You may need to request their ‘stapled super fund’ details from the ATO.
For more information and tailored support, please contact us today.