Superannuation increases to 10.5 per cent in July
The delay in superannuation increases is over and there will be an increase to the contribution rate of 0.5 per cent on 1 July 2022.
From this date the super contribution rate will be 10.5 per cent; with yearly 0.5 per cent increases scheduled for the beginning of each financial year for the next three 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.
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 super contributions are based on these ordinary time earnings this increase in 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.
Additional super changes
As part of the 2021–22 federal Budget, the Australian Government announced it will remove the $450 per month threshold to expand coverage of super guarantee to eligible employees regardless of their monthly pay.
From 1 July 2022, employers will be required to make super guarantee contributions to their eligible employee’s super fund regardless of how much the employee is paid. Employees must still satisfy other super guarantee eligibility requirements, such as workers under 18 working 30 hours per week.
If you have more questions regarding super contributions, ordinary time earnings or passing this increase on please contact the Employer Advice Team on 1300 889 198.
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