As of the 1st of July 2022, the Super Guarantee (SG) eligibility threshold of $450 was discarded and the SG rate increased from 10% to 10.5% in response to legislative changes. To put it simply, employers need to review payroll as all employees are now entitled to superannuation contributions regardless of monthly earnings and the amount of superannuation being paid to all employees will need to be adjusted to reflect the SG rate increase.
There will be regular adjustments to the SG rate in the coming years, with government intent to increase it to 12% by the 1st of July 2025. The rate changes can easily be adjusted by notifying your payroll or updating your payroll software to recalculate superannuation contributions accordingly. This might seem frivolous, but disregarding the gradual rate increase may see potential penalties for the underpayment of employees.
If an employer fails to correctly pay superannuation they may be required to repay the amount with interest, in addition to a possible administration fee. If ignored the ATO can issue a penalty notice and if further disregard is shown, noncompliance can be determined for the administration of significant fines and/or potential imprisonment.
We cannot emphasise enough the need to remain up to date with regular superannuation legislative changes. Do not rely upon payroll software alone! Ensure that the employees operating the software are adequately trained and receive regular industry updates of evolving Modern Awards, superannuation rules, and changes to employee circumstance.
If you haven’t already, you MUST send notice to all employees informing them of the upcoming changes to superannuation and whilst you are at it, any adjustments or changes in pay in response to the recent minimum wage increases.
For many small businesses managing HR can be a foreign and timely effort, especially when it comes to remaining compliant in response to continuously changing legislation. Outsourcing your HR efforts can reduce stress and allow you to manage your time and business more effectively. If you would like advice or assistance in adjusting and notifying employees of superannuation or minimum wage increases, then call us today at Assurance HR Management on 1800 577 515!
