The super guarantee rate is set to rise in July this year. A increase to 10% means an additional cost to your business. It will mainly affect employer expenses and may affect salary packages – so you should speak to your accountant.
The superannuation guarantee has stagnated at 9.5% since July 2014. However, there are intentions to increase the rate to 12% incrementally over a few years.
The proposed increases are as follows:
- July 2021 increase to 10%.
- Every year following, it will increase by 0.5% until July 2025, when it will stop at 12%
Because of the pandemic, there were discussions around delaying the superannuation guarantee rise. However, the increase from 2018 to 2021 was delayed, and the plans for the current increase are still in place.
How can you prepare for the July Super Guarantee rate rise?
- Analyse superannuation costs for all employees. This includes salary and hourly wage employees.
- Understand what salary packaging arrangements you have in your business. Think about if the agreement is inclusive of superannuation or not.
- We advise checking the contract’s wording for salaried employees to make sure you apply the changes correctly.
- Calculate the changes to payroll from July, and list a comparison. It is essential to do this so that you know exactly how the monetary difference will impact your business.
- Tell your employees where the law currently stands and what the proposed changes are. Note that this is the first year since 2014 that the rate has risen – and there is an intention to increase the superannuation guarantee by 0.5% each year.
How to prepare
It is vital to make your payments on time, as hefty penalties are dished out to those who pay late. Start planning now to increase and talk to your accountant now if you need help with payroll costs and employee agreements. Getting organised and understanding the rate rise with accurate reports means that you’ll be well prepared when the increased cost comes into play.
Accountants 2 Business can help with everything you need to know about the superannuation guarantee rise. If you have any questions, then reach out to us today.
Please arrange a meeting with one of our Accountants in Capalaba to discuss your particular needs. Accountants 2 Business Ph (07) 3823 2344
