As a part of the Federal Budget, there are some important changes coming to Superannuation in the next financial year which are important for businesses processing payroll to ensure ongoing payroll compliance.
Removing the $450 threshold for Super Contributions
The $450 threshold for monthly earnings will be removed as of 1 July 2022, so this will apply to your first pay run in July. Under this change, employers are required to pay the superannuation on all earnings, including the wages that are less than $450 within the month.
For employees under 18 (unless your employees are covered by a workplace agreement that states otherwise), super will still be payable once the employee works more than 30 hours within a week.
Increasing the Super Guarantee Contribution
The super rate is progressively increasing towards 12% by July 2025. As of 1 July 2022, your superannuation calculations will increase from 10% to 10.5% – This will apply to your first pay run paid in July.
If your employees are paid super as a part of a remuneration package rather than a calculation on ordinary time earnings, you will need to review the annual salary calculations for your employees.
Increase in the Maximum Contribution Base
The Maximum Contribution Base for each quarter is set to also increase in the new financial year, increasing from $58,920 to $60,220 income per quarter.
Stapled Super
As a part of changes introduced on 1st November 2021, when employees change employers, their superannuation fund will come with them unless they nominate a different fund. If the employee does not provide this information upon commencement, employers must request the employeeโs stapled superannuation details from the Australian Taxation Office (ATO). More information can be found on the Stapled super funds for employers page on the ATO website.
Your Payroll Calendar
Our team of Payroll experts recommends adding the above information to your payroll calendar, to ensure ongoing compliance with superannuation obligations. Employers must follow and also avoid any penalties for incorrect superannuation calculations or payments to employees.
We have put together some steps you can follow to guarantee you are ready for superannuation changes in Financial Year 2022-2023 below:
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- Check for any employees on a remuneration package within your payroll system, as their annual salary will change on 1 July 2022.
Process final payroll for the financial year. - If you are planning to pay Q4 superannuation to your employees within this Financial Year, we recommend processing this as early as possible (e.g. 17th of June), to ensure this is deposited into employee accounts within the month of June.
- Check the superannuation setup of your pay categories within your payroll system after your last payroll in June, in case you need to update each of these individually with the new 10.5% superannuation calculation rate.
- Check that the monthly threshold is removed from your payroll system as of 1st July 2022
- Check for any employees on a remuneration package within your payroll system, as their annual salary will change on 1 July 2022.
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Disclaimer
The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.