Compulsory superannuation contributions is one of the three pillars of the Australian retirement income system. Known as the Superannuation Guarantee (SG), it’s a forced savings scheme designed to provide an income to Australians when they retire, separate to salaries and wages. The other two pillars are a publicly funded Age Pension and voluntary savings (self-funded retirement).
On 01 July 2021, the Super Guarantee minimum contribution rate will rise from 9.5% to 10%.
If your small business has employees, you'll need to ensure your payroll and accounting systems are updated to incorporate the increase to the super rate. You can use the Australian Tax Office's Super guarantee eligibility tool to help determine which of your employees and/or contractors are eligible for SG contributions.
For salary and wage payments made on or after 01 July 2021, the new superannuation guarantee contribution rate of 10% will apply.
Super guarantee contributions for the quarter ending 30 June 2021 should be calculated at the old rate of 9.5%.
If you need help to work out how much super you need to pay your employees after 01 July, you can use the Australian Tax Office's SG contributions calculator.
Looking ahead, the Super Guarantee rate is scheduled to progressively increase by 0.5% annually until it reaches 12% by 01 July 2025.
We're here to help
If you're unsure how the Super Guarantee increase on 01 July will impact your business – from an administrative or operational perspective and to your business' bottom-line – get in touch with your Accounting Adviser at The Peak Partnership for clarity-driven assistance.