The percentage of an employee’s earnings used to calculate the contribution to their super fund has been raised from 9.5% to 10%. The percentage, known as the Superannuation Guarantee (SG) was raised and took effect 1 July 2021 and applies to all salary and wage payments made on or after this date. Employees will need to pay the correct amount to of SG to their eligible employees, which are full-time/part-time/casual workers paid $450 or more per month before tax (see here to use the eligibility tool) otherwise they risk paying a Superannuation Guarantee Charge (SGC). This Charge to the ATO includes the correct amount of SG, plus interest and administration fees. Additionally, the 2021 Federal Budget released in May revealed that from 1 July 2022, the $450/month minimum threshold will be removed, which employers will need to consider in next year’s SG calculations and payments.
Employers need to keep any eye on changes to the SG, now increases by 5% at the end of each financial year. Contact Morgan + English for any other employment queries.