Super Guarantee Rate Rise in July

Posted 21 Mar

Super Guarantee Rate Rise in July to 10.5%

The superannuation guarantee statutory rate is currently 10%. In July of each year until 2025, the rate will increase in 0.5% increments until it reaches 12%.

In July 2022, the rate will rise to 10.5%. From then on, the rate will increase by 0.5% each year until July 2025 when it will reach the legislated 12%.

Prepare Now for the July Rate Rise:

• Review your current superannuation costs for all employees, both hourly and salaried.
• Review any salary packaging arrangements. Is the agreement inclusive of superannuation or is super paid on top of the agreed salary?
• For salary packages inclusive of super, you will need to check the contract's wording to make sure you apply the changes correctly. This change may also impact annualised salary arrangements.
• Calculate your revised payroll costs from July, showing the current wages and superannuation expense compared to the new rate from July 2022. Highlight the increased amount per month or quarter, so you know precisely what the impact will be.
• Discuss the super rate increase with your employees now. Let them know that there will be an increase of 0.5% each year from now until July 2025 when the statutory rate will reach 12% and remain there.
• Remember – short payment or late payment of super can incur hefty penalties – plan now for higher payroll expenses from July, so you don't get caught short.
• Also, remember that the $450 per month threshold for super guarantee eligibility will be wiped from 1 July 2022.

Getting organised now means that you'll be well prepared for your business's increased costs when the first payment is due later this year.

Contact your WDF Professional team member if you would like help reviewing payroll costs and employee agreements. We can make sure you have accurate reports to make planning for the rate rise easier.

As accountants based in Wagga Wagga, we don't just crunch numbers and put figures in boxes, we provide a carefully researched and tailored accounting solution that suits all of our clients.