Super % Rate is on the Rise
The superannuation guarantee % rate is on the rise! Now 10.5% as of 1st July 2022 and on the creep to 12% by July 2025.
Are you an employer wondering if you need to update your software? Quick links here:
This is good news for employees (more in your retirement kitty) but for employers this is important news for cashflow!
What is the super guarantee (SG)?
It’s the super percentage that is paid to an employee’s super fund by the employer calculated on the worker’s gross ordinary time earnings (OTE) $.
Paid on wages/salaries, annual/personal leave, commissions or performance bonuses, etc; but
Not mandatory to be paid on overtime, annual leave loading or unused annual leave payout etc.
The (SG) rate will creep 0.5% each year until FY2026 when it reaches 12%. Our crystal ball to the right with the increments.
Superannuation guarantee is the amount paid on top of staff’s wages/salaries, paid by the employer as part of employment. Usually paid quarterly to an employee’s chosen super fund.
Are you extra contributing to your super?
Are you making contributions into your super over and above the amount your employer contributes or have you ever thought about this? We can help you calculate any changes and how this can save you tax.
It’s important to remember that SG, and its increased rate, goes toward what’s known as your Concessional Contributions Cap. A limit on the super contributions that can be claimed as a tax deduction each financial year (FY) of up to $27,500. The difference between what your employer contributes and this $27,500 is a tax planning opportunity!
If you’re currently taking advantage of this then you may need to alter/reduce the amount you contribute through the year (whether directly to your fund or as salary sacrifice) to ensure your employer’s increased contributions don’t push you over this cap.
This cap is calculated based on when your super fund receives the contributions.
Keep reading for our answers to your Frequently Asked Questions…
FAQ:
Can I claim the super guarantee my employer pays for me? No.
How will I know my employer increases my super? Look on your payslip after July. Divide the super against your ordinary gross earnings for the period to find the percentage to cross-check against the new FY’s SG rate, table above! Let us know if you’re unsure.
How often should my super be paid? Usually quarterly, click here for more info and check your super fund or myGov regularly each year to ensure the payments are received.
I heard my employer isn’t paying our super! What do we do? Check with your super fund or myGov to see what payments have been received and when. First, you need to determine if this is true and how far back it goes. If your super hasn’t been paid (keep in mind employer’s often pay quarterly), you can notify the ATO or your accountant for the next coarse of action.
Can I claim on tax if I contribute my own money to super? Yes. Up to the $27,500 cap (including what your employer contributes for you). This includes any super you salary sacrifice.
Can I contribute more than $27,500? You can. This counts toward what’s knows as your Non-Concessional Cap which has its own set of rules. Best to seek advice from us if you’re in this position.
Employers
Keep tabs on your accounting software to ensure it automatically updates the SG rates at each new FY within your payroll processing and on super contribution advices.
Remember you can only claim contributions made for your employees against your business income when they’re paid on time so keep on top of this.
We offer STP-compliant payroll processing services if you need an expert to handle this.
Chat to us more about this or anything else. Have a great day!