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New Financial Year, New SGC Rules
Eligibility for Super Changing

The ATO has reminded employers that from 1 July 2022 they will need to pay super for all employees, regardless of how much they pay their employees, because the $450-per-month threshold for super guarantee (SG) eligibility is being removed.

This change doesn’t affect other eligibility requirements for SG. Works who are under 18 still need to work more than 30 hours in a week to be eligible.

An employee’s eligibility for SG is determined by when they are paid salary and wages, not when they earn the income. This means, if an employer pays an eligible employee on or after 1 July 2022, the new rules will apply to the full amount, regardless of whether some or all of the pay period it relates to is before 1 July.

The ATO has advised employers to check their payroll and accounting systems are updated from 1 July so that they continue to pay the right amount of super for their employees. If this change means employers will be paying SG for an employee for the first time, they will need to follow the choice of super fund rules.

Super Guarantee Rate Increase

The ATO has reminded tax payers that on 1 July 2022, the super guarantee (SG) rate will increase from 10% to 10.5%.

The rate an employer is required to use depends on when their employee is paid, not when the income is earnt. This means the new rate will need to be applied to any payments of salary or wages made on or after 1 July 2022, even if some or all of the relevant pay period is before 1 July.

To prepare for these changes, employers are advised to check their payroll and accounting systems are updated to incorporate the increase to the super rate.

The SG rate is scheduled to progressively increase to 12% by July 2025.

Super Contributions Prior to EOFY

We recommend that employers pay their super guarantee contributions prior to 30 June 2022. This would qualify the contributions for a tax deduction in the 2021-22 financial year.

The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

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