Get a better understanding of the the changes to the super guarantee that will be applied from the 1st of July 2022
In this Blog, I am going to cover the changes that are coming to the Super Guarantee Charge and how they might affect you if you are a business owner or employee.
Super Guarantee Charge (SGC) refers to the minimum amount an employer is required to pay towards an employer’s chosen superannuation fund.
If you’re a business owner, these rates are extremely important. You will need to know when changes are made to correctly pay your employees.
What are the changes
Have a look at this table to work out the increase for each year.
| Date | Raised SG | Increase from 9.5% |
| July 2021 | 10% | +0.5% |
| July 2022 | 10.5% | +1% |
| July 2023 | 11% | +1.5% |
| July 2024 | 11.5% | +2% |
| July 2025 | 12% | +2.5% |
What this means for Employees
A rise to 10.5% on 1 July 2022 and a continuation of increases to 12% by 2025 means you will be paid more super and therefore build a higher superannuation balance for your retirement.
Industry Super Australia (ISA) have developed a calculator that compares what that extra percentage could look like.
If you haven’t previously been paid with super by your employer, you may now. The removal of the $450 threshold means that you may now be eligible for The Super Guarantee.
Super as a Contractor
If you are a contractor that works mainly for your labour you may be treated as an employee for SG purposes and will be able to choose the super fund you want your contributions paid into.
Calculate your super
Unsure what your super is?
What this means for you (a business owner)
These changes mean that from 1 July 2022:
- Employers will now have to contribute 10.5% to employee’s superannuation funds.
- Most importantly, One of the biggest changes for employers will be that all employees will now be eligible for SG. This means you may now have to pay SGC for employees who may not have been eligible in the past.
The ATO’s plan
The ATO are working fast to make sure that Digital Service Providers will have payroll software updated in time for the changes. The team at Second Look are aware of the changes and are happy to help guide you through this process.
What you need to do
Firstly, what you will need to do is make sure your payroll software is updated on the 1st of July.
If you do have employees that are newly eligible, you will want to provide them with a Standard choice form.
How your tax professional can help
All this new information might feel a little overwhelming, but don’t fret. The advisors at Second Look can help you determine what these changes mean for you and your business.
Book a consultation with us to stay on top of these changes and get the most out of your super.
Want to know even more?
Give us a call on 07 5530 5118 in addition, visit our website to find out what other services we offer.
Or
Set up a free 1-hour consultation
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