In line with the legislated superannuation guarantee (SG) rate increase, the SG rate will;
- increase to 10.5% on 1 July 2022
- steadily increase by 0.5% each year until it reaches 12% on 1 July 2025.
From 1 July 2022, two crucial SG changes will apply to your business. These are:
- The rate of SG is increasing from 10% to 10.5%
- The $450 per month eligibility threshold for when SG is paid is removed.
What this means for you
These changes mean that from 1 July 2022:
- You’ll need to make SG contributions at the new rate of 10.5%
- Employees can be eligible for SG, regardless of how much they earn. You may have to pay SG for some or all of your employees for the first time.
The ATO is working with digital service providers (DSPs like Xero, MYOB, etc.) to make sure payroll software is updated in time, and we can also assist you.
The ATO has online tools, and calculators will be available to help you from 1 July 2022.
What you need to do
Check that your software is updated to correctly calculate your employees’ SG entitlement from 1 July 2022.
If removing the $450 threshold means you’ll be paying SG for one or more employees for the first time, you’ll need to give them a Standard Choice Form.
If your employee does not provide you with a choice of super fund, review the Stapled Super Fund
information on the ATO’s website for guidance on what you need to do next. A stapled super fund is an existing super account linked to an individual employee.
For more information
The ATO has some helpful information about SGs on their website.
And as always, we are here to help, so do not hesitate to reach out and contact our Client Care Team today.