Superannuation Guarantee Was Raised to 10.5% from 1 July
Furthermore, the $450 monthly minimum earning restriction will be eliminated on July 1, 2022. This means that unless the salary exceeds the total superannuation contribution basis, all salaries are subject to superannuation. The Tax & Accounting Services in Brisbane will be able to explain in a better and more informative way.
Companies should also be informed of a rise in the National Minimum Wage, which applies to employees who are not covered by a collective bargaining agreement or an award. Beginning July 1, 2022, the National Minimum Wage would increase by $40 per week, a 5.2 percent increase. The new weekly National Minimum Wage would be $812.60, or $21.38 per hour.
As a result, beginning July 1, 2022, companies must not only change their payroll parameters to reflect the rate of rising but also contemplate the increasing cost of these modifications and the impending increases in the coming years. It is important to understand by Tax & Accounting Services Redlands that the increased SG rate would apply to wages paid on or after July 1, 2022, even if some or all of the work was completed prior to that date.
What are the effects on management and staff?
The parameters of existing and future pay and daily wage packages will determine the economic impact of the 0.5 percent superannuation guarantee (SG) rate increase.
The impact of the increase on specific salary packages must be carefully considered by Certified Business Accountants in Brisbane in order to determine if the additional 0.5 percent superannuation guarantee (SG) contribution should be incorporated into the current salary package (resulting in no change to the employee’s annual income) or integrated into the existing income package amount (resulting in a reduction in the employee’s take-home pay). Furthermore, companies must assess the impact of the superannuation guarantee (SG) rate rise on appropriate employee awards.
Employee salary sacrifice contributions will not be able to cover the 0.5 percent increase. It is also critical to remember that the approximate time earnings (OTE) foundation for Superannuation Guarantee requirements now include any sacrificed OTE sums. This means those salary sacrifice contributions made for the benefit of an employee are not considered employer contributions that reduce an employer’s charge percentage.
The Federal Government establishes a maximum limit on an employee’s income on which employers must pay superannuation guarantee (SG) contributions each year, known as the max superannuation contribution base. The highest super contribution base would rise to $240,880 per year from $235,680 per year as a result of the 0.5 percent increase.
For 2022–23, the yearly concessional contribution ceiling stays at $27,500. Any donations made in excess of this amount may be subject to a higher rate of taxation as well as an over-contribution charge.
If you have any queries about your superannuation obligations or compliance with the SG rate increases beginning July 1, 2022, please feel free to contact our adviser from Southern Cross Accounting.
How Xero accounting software will benefit their customers.
If your settings are accurate, Xero may handle superannuation guarantee (SG) payment rate increases and update them for you. We recommend that you evaluate your payroll parameters in Xero before July 1, 2022.
If a worker has the Statutory Rate option enabled in Xero, the new offer is automatically transferred into pay runs beginning on July 1, 2022. If your employee has not selected the Statutory Rate option, you can examine this in their Payment Template and manually alter the rate if necessary.
If the following conditions are met, the Statutory Rate alternative is automatically applied to your existing workers’ pay templates as well as superannuation lines:
- The contribution type is SG Contribution.
- The Statutory Rate is the calculation type.
- On the employee’s compensation template, the percentage applied is 10.5 percent.
- For new employee pay templates, any superannuation lines you add are set to the statutory rate option.