The Superannuation Guarantee (SG), are payments made by employers to complying Superannuation Funds on behalf of their employees. It is a compulsory payment required for all eligible employees, legislated by the Australian Government and managed by the Australian Taxation Office (ATO).

For the first time since 2014, the SG has increased from 9.5% to 10% of an eligible employees ordinary times earnings (OTE). This change is effective from 1 July 2021.  

So as an employer, what do you need to do? If you have an up-to-date payroll system compliant with Single Touch Payroll (STP) such as MYOB or Xero, your payroll system should be updated automatically for existing and new employees with the new rate.

However, care should be taken with existing salary packaging arrangements to consider whether the additional 0.5% SG is required to be added on top of the existing salary package (i.e. no change in the employees take home pay) or incorporated into the existing salary packaged amount (i.e. resulting in a decrease in the employees take home pay).

Beware also of salary Sacrifice arrangements, as the OTE base for SG purposes includes any sacrificed OTE amounts.

Also remember that all SG contributions are reported to the ATO with every payrun reported through STP. It is therefore critically important to ensure that all superannuation payments are made on time. If payments are late or not paid, you not only lose the tax deductibility of the payments, but are required to lodge a superannuation guarantee charge (SGC) statement with the ATO. This will incur Interest and SGC charges on the outstanding Super payments. In addition with STP, the ATO can now see in real time whether you have met your SG obligations or not, so there is no avoiding them.

The due dates for quarterly super guarantee amounts are as follows:

• 1 July to 30 September – 28 October
• 1 October to 31 December – 28 January
• 1 January to 31 March – 28 April
• 1 April to 30 June – 28 July

With all the new reporting requirements, and the ATO data matching facilities, it is doubly important to ensure you are meeting all your employee / payroll SG obligations. If you find yourself unsure of any of the employee salary packaging arrangements, or payroll software setup and reporting, be sure to contact your tax professionals who are ready to assist you.

So are you ready?

Written for you by Stephen Imms