The following changes to Superannuation will be implemented from 1 July 2022.
Increase in Superannuation Guarantee
Employers are required by law to pay the superannuation guarantee (SG) contribution. This will increase 10.5% of an employee’s regular earnings, an increase of 0.5% from 10% in the current financial year.
SG contribution will continue to increase by 0.5% each year until it reaches 12% by 2025.
Employers should be made aware that these increases to SG contributions will also further increase employment costs of those paid per hour, as well as salaried employees who are exclusive of superannuation.
For those salaries who are inclusive of superannuation, the increases may potentially be able to be included within their salary package, alongside a decrease to base salary, provided that their employment contract allows for this, and the adjustment does not take them below the applicable minimum wage.
Removal of $450 monthly SG threshold
From 1 July 2022, the $450 monthly minimum wage threshold (to qualify for employer SG contributions) will be removed.
What this means for employers, is that they will now be required to make SG contributions for all their employees, including both casual and part-time employees, regardless of their earnings.
Employees under 18 years of age will only be eligible for SG contributions if they are working more than 30 hours per week, no matter their wage.
From 1 November 2021, the Federal Government had introduced the concept of ‘stapled funds’ for employees who do not nominate a superannuation fund upon starting new employment.