Here is a summary of the most significant changes in super that will likely affect small business owners and go into effect on July 1, 2022.

Superannuation guarantee increase to 10.5%

On July 1, 2022, the Superannuation Guarantee (SG) rate will increase from 10% to 10.5%. It will thereafter grow by 0.5% per year until July 1, 2025, when it will reach 12%.

Your employment agreements will determine what this means if you have staff. The employee’s take-home pay may be decreased by 0.5 percent if the employment agreement specifies that they be paid on a “total remuneration” basis (base plus SG and any additional allowances). In other words, a larger portion of their overall compensation will go into their superannuation fund. The 0.5 percent rise will be included to the employees’ SG payments if they are paid at a rate plus superannuation; in other words, their take-home pay would stay unchanged.

$450 super guarantee threshold removed

The $450 threshold test will no longer apply starting on July 1, 2022, and all employees who are 18 years of age or older will need to be paid superannuation guarantee regardless of their income. Make sure your payroll system takes this change into account to avoid accidentally underpaying superannuation.

For employees under 18, superannuation guarantee is only paid if they work more than 30 hours per week.

Questions? Contact us to get in touch with one of our business advisors.

This page contains information that is of a general nature. It does not take into account your specific requirements or circumstances. Before making any financial decisions, you should consider your individual financial situation, objectives, and requirements, and seek financial advice.