This article is relevant for employers meeting Superannuation guarantee requirements
Key points
From 1 July 2021 the SG contribution rate for all employers increased to 10% (up from 9.5%).
The first contribution of 10% (for the quarter ended 30 September 2021) must be paid by 28 October 2021 – so there is still time to rectify any shortfall in the contributions at the new rate.
Detail
Employers must pay at least 10% of employees’ Ordinary Time Earnings (OTE) into superannuation.
The Superannuation Guarantee (SG) rate, as currently legislated, will allow for further increases of 0.5% per year to arrive at 12% from 1 July 2025 onwards.
These compulsory payments are known as superannuation guarantee (SG) contributions.
The table below outlines the current rate and timeframe for future increases.
How to calculate SG from 1 July 2021
SG contribution = OTE x SG contribution rate (10%)
Updated maximum contribution base
The maximum contribution base in 2021/22 is $58,920 per quarter. However, employers can make superannuation contributions above this amount if desired.
Source: ATO
Superannuation payment due dates
You must pay superannuation for eligible employees to avoid the super guarantee charge. Payments must be made at least four times a year by the following due dates:
The super guarantee charge
If you do not pay an employee’s minimum superannuation guarantee amount on time and to the right fund, you must pay the superannuation guarantee charge (SGC). You must also lodge an SGC statement with the ATO.
The SGC is more than the super you would have otherwise paid to the employee’s fund and is not tax deductible.
Important note: Employers should review employee arrangements to ensure compliance with the increase in SG from 1 July 2021. If payroll settings and systems have not been updated, you still have an opportunity to rectify prior to first quarter payment due date of 28 October 2021.
Should you have any questions regarding this matter, please contact your Blaze Acumen advisor.