In the Budget, the Government confirmed its commitment to incrementally increase the Superannuation Guarantee (SG) rate to 12%. however, it has re-calibrated the pace of the increase as follows:
|SG Rate||Amounts Earned From|
|9.25%||1 July 2013 to 30 June 2014|
|9.5%||1 July 2014 to 30 June 2018|
|10%||1 July 2018 to 30 June 2019|
|10.5%||1 July 2019 to 30 June 2020|
|11%||1 July 2020 to 30 June 2021|
|11.5%||1 July 2021 to 30 June 2022|
|12%||1 July 2022 onwards|
Take Home Messages;
- From 1 July 2014, the SG rate will definitely increase from 9.25% to 9.5%. This is already legislation.
- There is no requirement to actually pay the 0.25% increase out of your own pocket where the employee is employed on a superannuation-inclusive package. Subject to the terms of an employment agreement this amount can simply be taken from an employee’s salary and re-directed into superannuation. If you intend to do this, we recommend that you give employees advance notice.
- The new SG rate of 9.50% is only applicable to payments of salary made on or after 1 July 2014 – this is regardless of the period in which the services that the payment relates to were performed by the employee.
Want more information?
- Learn more about Super, including helpful videos, from the ATO.
- Speak to your accountant for more personal advice about your superannuation.