Superannuation payments to increase from July
The delay to superannuation increases is over and there will be an increase to the contribution rate of 0.5 per cent on July 1 2021.
From this date the super contribution rate will be 10 per cent; with yearly 0.5 per cent increases scheduled for the beginning of each financial year for the next four years.
The final contribution rate will be 12 per cent.
The Superannuation Guarantee Ruling (SGR 2009/2) describes how employers must use pay items that are within the meaning of Ordinary Times Earnings (OTE) to calculate superannuation guarantee contributions.
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The total of the earnings in respect of ordinary hours of work other than earnings consisting of a lump sum payment. OTE also consists of over award rates, most allowances, shift loading and commissions but excludes overtime payments.
As contributions are based on these ordinary time earnings this superannuation increase to super contributions will need to be passed on to workers and cannot be absorbed by over-award rates of pay.
Some rare exceptions for members with ‘total package salary arrangements’ may mean employers have other options; however, a close analysis of those employment contracts will be highly recommended.
Contributions are paid quarterly in accordance with the below ATO schedule:
|Quarter||Period||Payment due date|
|1||1 July – 30 September||28 October|
|2||1 October – 31 December||28 January|
|3||1 January – 31 March||28 April|
|4||1 April – 30 June||28 July|
Offset late super payments against the SGC are not tax-deductible.
As an employer, you must pay super contributions for your eligible employees to a complying fund or retirement savings account to avoid the super guarantee charge.
All Master Electricians have unlimited access, no cost, to the Employer Advice hotline. One of the many benefits of being a Master Electrician. Phone direct on 1300 889 198.