Superannuation Guarantee Rate Increase
Effective 1 July 2013, superannuation guarantee contributions rate is set to increase 0.25% to 9.25%. This has to be paid on superannuable payments to employees on or before the said date even if the pay is for services rendered before July.
The rates increase may:
- Affect a great number of employees who are seen to receive less take home pay.
- Impact employees who sacrifice part of their salary to pay their super contributions.
From Minimum Contribution
1 July 2013 9.25%
1 July 2014 9.50%
1 July 2015 10.00%
1 July 2016 10.50%
1 July 2017 11.00%
1 July 2018 11.50%
1 July 2019 12.00%
Super guarantee is also seen to apply on employees aged 70 and above as the upper age cut-off is removed effective 1 July 2013. Contributions for said employees must start as well as for directors over 70. The expected amount is 9.25% of paid earnings or 9.25% of the quarter’s maximum contribution, whichever is lower. Tax deductions apply on contributions paid on time.
Default Fund Arrangements
Effective 1 January 2014, employers must change default superannuation guarantee contributions to eligible default super fund. MySuper product offer with required contributions for default employees must be in place in order to qualify for default super fund. Without MySuper product offering, employers must select a new eligible default fund or face financial penalties.
Contribution Payment and Data Policies
Effective 1 July 2014, employers with over 20 employees are required to make electronic superannuation contribution payments. Along with the payment, they must also electronically transmit their contribution remittance report. Payroll software suppliers are expected to provide the solutions for the electronic processes or consider superannuation clearing houses.
For employers with less than 20 staff, they must comply to this new legislation starting 1 July 2015.
Reporting of Payslips and Contributions
Employers were said to report the amount of super contributions and the date paid on employee payslips. However, the regulation governing this is yet to be prescribed by the government.