Super Guarantee is rising to 10.5% on 1 July

On 1 July 2022 this year, super is changing for employers. Here’s a rundown of what you need to know so you can get your payroll systems sorted with time to spare.

The super guarantee is rising

The superannuation guarantee (SG) is going up. This may sound like a familiar story, as it rose last year and is set to rise again in 2023 as part of government legislation to increase SG to 12% by 2025.

The current rate is sitting at 10% and will change to 10.5% on 1 July 2022.

Whether you pay SG fortnightly, monthly or quarterly, you’ll need to check that all eligible employees are receiving the new, higher amount of 10.5% as part of their salary package. The first ATO quarterly deadline this change will apply to is 28 October 2022. This covers the period 1 July to 30 September 2022.

You’ll also want to check what this means for any high-earning employees. That’s because the maximum super contribution base will also rise on 1 July 2022, ticking up a few thousand dollars to $60,220 quarterly for the 2022/23 financial year. This means if you have any employees earning above this amount in a quarter, you don’t have to pay SG contributions on the part of their earnings that’s over the limit.

Super to cover more employees

Also from 1 July 2022, the $450 monthly income threshold for superannuation will be removed, meaning around 300,000 low-income workers will qualify for SG payments for the first time.

Until now, the threshold has meant anyone earning less than $450 per month from a single employer wasn’t eligible for employer contributions, even if their overall earnings from multiple jobs was more than $450!

A lack of super contributions over time can seriously impact retirement savings, so this change is a meaningful one for many employees, particularly seasonal and casual workers.

If you have employees who fall into this category, you’ll need to prepare to start paying them super. Other SG eligibility criteria still apply, such as employees aged 18 or younger needing to work more than 30 hours per week to qualify.

How can employers get prepared?

Make sure you check and update your payroll and accounting systems before 1 July 2022 with these new rules in mind.

Supporting employers through change

We’re here to help you prepare for 1 July, whether that’s chatting to your payroll team or visiting your worksite. Get in touch with one of our local Coordinators or call us on 1300 943 171 for help.