From 1 July 2023, the Superannuation Guarantee (SG) will increase from 10.5% to 11% — the third increase since the Federal Government passed a bill to amend the Superannuation Guarantee (Administration) Act 1992. As per the amendment, the Super Guarantee is set to rise again in 2024 to 11.5% before peaking at 12% in 2025.
If you are an employer, this increase, and subsequent increases over the next couple of years, will have an impact on your payroll management and accounting systems.
Here is what you need to know to make sure that you are prepared for the increase.
What are my obligations as an employer?
As an employer, you will need to ensure you pay the right amount of Super Guarantee contributions at the new rate of 11% to your employees' eligible super fund.
You need to make sure that your payroll and accounting systems are updated to reflect this increase from 1 July 2023 to ensure that you are correctly calculating your employees' Super Guarantee entitlements. Failing to pay an employee's minimum SG amount on time or to the right account may result in harsh penalties.
The extent to which your payroll management is affected will depend on how your employment contracts are structured, with the most common arrangements being:
- a base salary plus Super; or
- a total remuneration package that includes Super.
How to prepare for the increase
All employers need to review their payroll and accounting systems each financial year to make sure that their Super contributions meet the required Super Guarantee rate, especially as it continues to progress towards 12% in 2025.
It is important to note that some employers may be exempt from paying Super Guarantee contributions in some instances. We recommend visiting the Australian Taxation Office (ATO) website for more details on your specific Superannuation contribution obligations.
Here is how Azure Group can help
Azure Group has a dedicated division of experienced payroll and accounting professionals. Our team can help you understand your payroll obligations and ensure that you remain compliant with regulatory bodies, especially following any changes to government legislation.
By outsourcing your Payroll Management to an experienced accounting firm, you can ensure that your payroll processes are always accurate and compliant. If you would like to know more about the Super Guarantee increase or how we can help you manage your payroll and accounting functions, contact us today.
Related: A Guide to outsourcing your Accounting and Payroll
Have you noticed our #FridayExpertTips... here's one that relates to #Accounting
“There are a lot of rules and government requirements around Payroll. The more employees you have, the more complex your payroll usually becomes. Outsourcing your payroll to a professional service firm may give you peace of mind."