The Super Guarantee Contributions (SGC) Rate will increase from 9.5% to 10% from 1 July 2021, and increase by a further 0.5% each year until it reaches 12%.
This has been legislated for some time, but the government had been subject to lobbying to pause the legislated amendments, particularly whilst the economy recovers post COVID.
As the May 21 budget was silent on this issue, the legislated changes will occur.
Here are the past and present SGC rates, as well as the currently legislated future changes to the rate:
Who is eligible for Super Guarantee Contributions?
For all employees paid $450 or more (pre-tax) each month, regardless of whether they’re full-time, part-time or casual, you need to pay SG contributions.
However, this $450 threshold is set to be scrapped by 1 July, 2022. After this date, even if your employee is not earning $450 or more a month, you may still need to pay super contributions.
This includes any employees you have who are under 18, or a domestic or private worker (such as a nanny or housekeeper) that have worked more than 30 hours per week.
In addition, you may need to pay super for some contractors (for example, if you pay your contractor wholly or principally for their personal labour and skills), even if they have an Australian Business Number (ABN).
Temporary residents, such as those on visas, are also typically eligible for SGC payments.
If you have any questions, or need support with these changes to the Super Guarantee Contribution rules, please contact your Client Manager.