Are you ready for the new superannuation changes?
The Federal budget has confirmed that the planned superannuation increase will go ahead. This means that the Super Guarantee Contribution (SGC) employers make will increase to 10%, effective 1 July 2021.
Additionally, employers will, from 1 July 2022, be required to pay the SGC on employees who earn an income of under $450 a month. Up until now employers were exempt from paying this.
Next steps
- Check your employees employment contracts. If your employees are remunerated under a superannuation-inclusive remuneration package, their take-home cash pay will likely reduce from 1 July 2021. As such, we recommend employers consider communicating the potential decrease in take home pay to their employees as early as possible to avoid any queries or complaints arising. Alternatively, if you are considering implementing a pay increase to ensure consistency in take-home cash payments, this will need to be appropriately communicated.
- Where SGC is paid on top of an employee’s base salary, it is still important to communicate this increase to your employees and advise that it will result in an increase to the amount of superannuation contribution they receive into their fund from 1 July 2021 with no change to their salary.
- Notify your employee that they may wish to review their Salary Sacrifice or after-tax contributions arrangements in light of the change.
Please contact the team at Your HRmanager should you wish to discuss these changes.