'Are You Prepared for Changes in Superannuation From 1 July 2021?'
All employers in Australia should be aware and executing for the changes in Superannuation that were effective 1 July.
The increase in the Superannuation Guarantee (SG) from the previous level of 9.5% to 10% from 1 July 2021 is the big change. You will need to ensure your payroll systems are set up for this change otherwise as an employer you will be in breach of the SG Act and face penalties if you do not comply.
Depending upon how your employment contracts are set up, you may have the ability to reposition the employees’ gross pay into the super increase or it may require an increase in your total payroll costs if super is positioned as incremental to the gross salary.
The strategy adopted by your business is important as we have not had an increase to the guarantee since 2014 and looking forward from this year, it will increase 0.5% each year to 12% in 2027
The Concessional Superannuation Cap, being the total super that can be paid into a super fund in a financial year with the concessional tax rate of 15%, has also changed effective 1 July 2021, increasing from $25,000/year to $27,500/year.
The Maximum Contribution Base only relates to high income earners, being the maximum cash salary on which superannuation is payable. For 2022, this will equate to a gross salary of $259,248/year.
Finally, since its inception, the SG has only applied where an employee earns in excess of $450/month. This minimum monthly earnings are no longer applicable from 1st July 2021. It means that even if a casual only works a few hours a month superannuation will be payable.
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