As the new financial year approaches, there are changes to who is eligible for super and how much employers need to pay.
Removing the $450 threshold
Generally, if you pay an employee $450 or more (before tax) in salary or wages in a calendar month, you must also pay super guarantee for them. Salary or wages includes any overtime.
From 1 July 2022, employees can be eligible for super guarantee (SG), regardless of how much they earn. This is because the $450 per month eligibility threshold for when SG is paid is being removed. You only need to pay super for workers under 18 when they work more than 30 hours in a week.
Employees will still need to satisfy other eligibility requirements. This includes other workers who are eligible for super including contractors.
Use the Super guarantee eligibility tool to find out whether you need to make super contributions for your workers.
Super guarantee increase
The super guarantee (SG) rate will also increase from 10% to 10.5% on 1 July 2022. Employers will need to use the new rate to calculate super on payments you make to employees on or after 1 July, even if some or all of the pay period is for work done before 1 July. The SG rate is legislated to increase to 12% by 2025.
Employers need to ensure payroll systems are updated to pay the right amount of super for your employees
Contact KMT accountants now if you need further assistance!
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek tax advice from a qualified accountant at KMT Partners. Information is current at the date of issue and may change.