As the new financial year approaches, two significant changes to the Super Guarantee (SG) will impact your business. Specifically, the SG rate is increasing from 10% to 10.5%, and the $450 monthly threshold for SG eligibility is being removed.
What Does This Mean for Your Business?
-end=”602″>From 1 July 2022, employers must make Super Guarantee SG contributions at the new rate of 10.5% to their employees’ eligible super funds—regardless of how much the employees earn each month.
Previously, employers generally had to pay SG if a worker earned $450 or more in a month. However, starting 1 July 2022, you must make SG contributions for all employees, regardless of their monthly earnings.
The SG rate is scheduled to gradually increase to 12% by 2025.
What Do You Need to Do?
As a business owner, it’s essential to update your payroll and accounting systems by 1 July 2022. This change helps employers calculate SG contributions correctly under the new rules.
If removing the $450 threshold makes previously ineligible employees eligible for SG, you must give them a Standard Choice Form. If the employee doesn’t choose a super fund, you may need to request their ‘stapled super fund’ details from the ATO.
Please note: Employers are exempt from SG contributions in certain cases. For more details about the upcoming changes, visit the ATO website.
Considering Outsourcing Your Payroll?
If you need help understanding these changes or are thinking about outsourcing your payroll, our team is here to support you.
Managing payroll in-house can be time-consuming and costly—especially with ongoing regulatory updates. Our team of qualified tax and accounting professionals use industry best practices to streamline your payroll process. We offer real-time reporting and ensure compliance with all relevant authorities.
Related: A Guide to Outsourcing Your Accounting and Payroll
#FridayExpertTips
“There are many rules and government requirements around payroll. The more employees you have, the more complex it becomes. Outsourcing to a professional payroll service can give you peace of mind.”
