Super Guarantee: $450 eligibility threshold to go

As part of last year's Federal Budget handed down on 11 May 2021, the Australian Government announced it will remove the $450 per month earnings threshold for employees to receive superannuation guarantee contributions from their employer.

Currently, employers do not need to pay superannuation to workers who earn less than $450 per month.

This change, which takes effect from 01 July 2022, will expand the coverage of super guarantee contributions to eligible employees regardless of their monthly pay. Employees must still satisfy other super guarantee eligibility requirements.

The change is now law under the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021, with royal assent on 22 February 2022.

According to the government’s Retirement Income Review, around 300,000 employees will benefit from removing this monthly threshold, with 63% of those employees women.

The Australian Tax Office has stated that it will work with digital service providers to help them update their payroll and accounting software to be ready for this change.

Employers will need to check their payroll and accounting systems have been updated for super payments made after 01 July 2022 to ensure they correctly calculate their employee’s super guarantee entitlement.

If you want to check if this change will impact your employees and your business' superannuation guarantee liability from 01 July 2022, feel free to contact your Accounting Adviser at The Peak Partnership on 3360 9888 or with a quick email.

Lastly, don't forget that the superannuation guarantee rate will increase to 10.5% for the 2022-2023 financial year.


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