Superannuation Increase to 10%

Good news for the employees – Superannuation will increase from 9.5% to 10% from 1st of July 2021. 

How do you ensure you are paying the correct amount as a business owner? It is important to note that the new rate of 10% is only applicable to any salary and wage payments made to workers on or after 1 July 2021 – this is regardless of the period in which the services were performed by the employee.

We had some feedback about this and asked the ATO for confirmation, the acting Commissioner of Taxation for Super and Employer Obligations has now confirmed the suggested treatment below.

If the pay period ends before 30 June, but the pay date falls on or after 1 July, the 10% rate applies on those salary and wages. The date of salary and wage payment determines the rate of super guarantee payable, regardless of when the work was performed.

For example, if the work was done:

• in June (or partly in June and partly in July) but employees were paid in July, the rate is 10% and contributions totalling 10% of the employee’s ordinary time earnings for the September 2021 quarter must be made to the employee’s super fund by 28 October
• in July but employees were paid in advance (before 1July), the rate is 9.5% and contributions totalling 9.5% of the employee’s ordinary time earnings for the June 2021 quarter must be made to the employee’s super fund by 28 July.