The 'exclusion of mention' in the Federal budget on the increase to Superannuation obligations leads us to believe that the legislative changes are now definitely taking affect.
As of 1st July this year (2021)The superannuation that you need to pay your employees will increase from 9.5% to 10%.
This increase will require employers to contribute an additional 0.5% to meet their SG obligations under the Superannuation Guarantee (Administration) Act 1992 (Cth)(SGAA).
Unless your employees have a superannuation inclusive remuneration package, employers should be considering the implementation of this pay increase, including their own costings and budgets.
What if my employee is paid above the minimum award rates?
A person who is paid above the minimum or award wage could, subject to their employment agreement or industrial conditions, have their rates reduced so that their total remuneration, including the increased superannuation, amount does not change. Accordingly, if this is the case, communication with the employee is paramount as their net 'take home' wage will decrease whilst it absorbs the additional SGC payable
The increase now means that $1 out of every $10 paid to your employees is actually a deferred wage for their future income. According to a Sunsuper report, only 3% of employees actually understand what their superannuation is, where it is being invested and who is funding it.
Why has the Superannuation been increased?
Especially in light of Covid and the economic vulnerability before us, many are wondering why the Government has stood firm with the legislative changes and increased the SGC (Employer paid superannuation).
Well, here it is : Many Consider the increase is critical to help individuals achieve a dignified retirement as well as improve the sustainability of the Age Pension - Taking pressure off future federal Government budgets as population ages.
What do I need to do to comply?
Speak with your bookkeeper or Accountant to ensure that any changes to your systems, procedures and / or software will be updated as at 1st of July.
Call us today to make an appointment 0409 715 577
This articles intention is to inform rather than advise and is based on legislation at the time. Each Taxpayer’s circumstances vary so we strongly recommend that you discuss this information with your Tax Agent, Accountant or Bas Agent before implementation. If you take, or do not take action as a result of reading this article, we accept no responsibility for any financial loss incurred. General advice only. Source : ato.gov.au
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