In addition to the expected statutory superannuation rate rise to 10.5%, the government has announced new superannuation rules, removing the $450 threshold for superannuation eligibility from 1 July 2022. If you’re a business owner who employs a pool of casual workers who earn less than $450 per month, you’ll need to prepare for this change.
New Superannuation Rule to Remove the $450 Monthly Earning Threshold
The $450 monthly income threshold to receive employer contributions under the superannuation guarantee rules will be removed from 1 July 2022. It means employer will need to pay superannuation contributions on all ordinary earnings for all employees.
If your business relies on a pool of casual workers who earn less than $450 per month, you’ll notice the extra cost when it comes to paying super for the September quarter.
There are some exceptions to the rule. Employees under 18 and domestic workers need to work more than 30 hours per week and earn more than $450 per month. Contractors deemed employees for superannuation contributions must earn more than $450 per month. There are also different rules for international and temporary workers.
Check out the ATO website to work out if you have to pay super.
Single Touch Payroll Superannuation Reporting
All your payroll details are now reported to the ATO through STP. This includes superannuation amount owed to employees. If you want to know about Single Touch Payroll (STP), you can read more about it here.
Late payment and interest penalties apply, so this is one employer obligation you don’t want to miss.
Get Ready for Increased Payroll Costs
You can prepare for the change by being proactive and start budgeting for the increased payroll costs. You can also inform your employees about the changes coming to their superannuation, so they know about their entitlements.
Book a time with us to review your payroll systems and costs. We’ll help you plan for the impacts of the increased superannuation expenses on your business.