After the recent announcement in the Federal Budget employers need to be aware of tweaks made in relation to their employee’s superannuation requirements.
The government has resisted the urge to delay bringing in the already slated increase in superannuation guarantee, so from 1 July 2021, the minimum superannuation guarantee will increase from 9.5% to 10% for employees who’s monthly ordinary times earnings exceeds $450. The minimum rate is still scheduled to continue increasing by 0.5% per year until it reaches 12% by 1st July 2025.
Further to the increase in SGC, it has also been proposed that superannuation will be required to be contributed to a complying superannuation fund for all employees regardless on their monthly income (not just those earning over $450/month) from 1st July 2022. As of time of writing this article, this measure is not law yet however we recommend clients with employees earning under $450 per month be aware of the proposed changes to ensure they are ready to comply with the changes and what impact that may have on their employment costs.
For those people trying to put more money into super, starting 1 July 2022, there will also been relaxing of age thresholds for people who can contribute using the Downsizer Scheme, as well as the removal of the work test for people aged 67-74.
Please reach out to our office if you need to discuss how the above changes will impact your specific situation.
Contributed by Adam Burgess.