Keeping up with changes to the Fair Work Act
30 Jul 2021
In response to a legislated increase to Superannuation Guarantee rates, from July 1 2021 all employers will have to pay 10% Superannuation to their employers, up from the previous rate of 9.5%. This is part of the wider, staged increase that will see the superannuation rates rise to 12% by 2025 – which means a rate increase of 0.5% each financial year.
What does this mean for employers?
In short, this means that all existing employees are receiving a wage increase. As an employer, it’s important to note that you cannot reduce the base salary that you pay your employees to absorb the changes to the superannuation rate.
Take Simone for example:
Simone has been on an annual wage of $70,000. On top of her wage, she was paid an additional $6,650 per year in superannuation – which equals 9.5% of her base salary. This brings her total wage package to $76,650.
From July 1 2021, Simone will now be owed $7,000 in superannuation – or 10% of 70,000 – bringing her total salary package to $77,000.
So, what action do you need to take as an employer?
In good news for our customers, if you’re already with More Bookkeeping, you don’t need to lift a finger – we’ll take care of the whole process.
If you’re not a More Bookkeeping customer, there’s never been a better time to become one – we can make sure your business is compliant and your bookkeeping a breeze!
For all other employers, you will need to update your payroll systems to include the additional amounts so your employees are paid the additional 0.5% superannuation on top of their current wages. If you fail to comply with the changes, you will likely be required to complete a Super Guarantee Charge (SGC) which may incur some extra charges.
If you would like to get in touch with our team and discuss how More Bookkeeping can better keep your books, we’d love to help – just send us an enquiry and we’ll get back to you as soon as we can.
30 Jul 2021
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