Super guarantee increase 1 July 2021

17 March 2021

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The superannuation guarantee (SG) is scheduled to increase to 10% from 1 July 2021.

Despite media reports suggesting the SG increase may not go ahead as planned, employers need to be ready for this legislated increase.

From 1 July 2021 SG is scheduled to increase from the current rate of 9.5% to 10%. It is then planned to increase by half a percent each year until it reaches 12% in 2025.

Period

Super guarantee rate 

 1 July 2021 – 30 June 2022

10% 

 1 July 2022 – 30 June 2023

10.5% 

 1 July 2023 – 30 June 2024

 11%

 1 July 2024 – 30 June 2025

 11.5%

 1 July 2025 – 30 June 2026

12% 

 

SG is the minimum super an employer must pay their employees. From 1 July the minimum super that must be paid to an eligible employee will be 10% of their ordinary time earnings – the amount an employee earns for their ordinary hours of work (including over-award payments, commissions, allowances and paid leave). Find out more about ordinary time earnings.

As an employer it’s important to ensure you pay super at this new minimum rate as there are financial penalties for not meeting your SG obligations.

The Super Guarantee Charge (SGC) is the penalty charged when employers don’t pay:

  • the required super guarantee contributions for each eligible employee
  • super contributions by the cut off date for payment or
  • super to each employee’s chosen super fund.

This SGC penalty is not tax deductible and is made up of SG shortfall amounts, interest on those amounts (currently 10%) and an administration fee of $20 per employee, per quarter. More on the SGC is available from the ATO.

If you have questions about paying the correct super for your employees, you can call your BUSSQ Account Manager for help.

This information is general advice only and does not take into account or consider your personal objectives, financial situation or needs. Prepared by BUSS (Queensland) Pty Ltd (ABN 15 065 081 281, AFSL 237860) as Trustee for BUSSQ (BUSSQ Fund, ABN 85 571 332 201). BUSSQ owns Skylight Financial Solutions Pty Ltd (ABN 46 076 835 848, AFSL 450139), the company that provides financial advice to our members.

 

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