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More super for eligible employees from 1 July 2023

Employers are mandated to make an increase of super guarantee contribution from 10.5% to 11% of an eligible employee’s before-tax salary or wages at the start of July 2023.

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Employers are mandated to make an increase of super guarantee contribution from 10.5% to 11% of an eligible employee’s before-tax salary or wages at the start of July 2023.

Here are 8 things you should know, including what it could mean for your take home pay in terms of wealth management in Brisbane and rest of Australia.

What is the Super Guarantee?

The Super Guarantee is a percentage of your before-tax salary or wages, set by the government, that your employer is required to contribute into your super.

The purpose of these contributions is to provide people with income during retirement, which you may receive in addition to the government Age Pension, depending on your situation.

Who’s eligible for SG contributions?

Full time, part time and casual employees, including temporary residents are generally eligible. So are employees under 18, as well as private and domestic workers, working more than 30 hours a week, in addition to some contractors.

Will the increase affect my take home pay?

If you’re paid your salary plus super, generally you won’t see a reduction to the money you take home.

If your pay package is inclusive of super, your employer may choose to reduce your pay to cover the increase in super contributions, or they may choose to cover the increase themselves.

Check your employment contract to see how changes may affect you.

What if I’m self-employed?

Compulsory contributions aren’t mandatory if you’re self employed, so you could consider making voluntary contributions into your super.

If you make voluntary after-tax contributions into your super, you may be able to claim a tax deduction on these at tax time, in addition to other work-related expenses.

Are future SG rate increases expected?

The SG rate is scheduled to increase in increments and gradually reach 12% by 1 July 2025.

When are SG contributions paid?

SG contributions must be made at least four times a year on dates set by the ATO. Employers can choose to do this more frequently if they choose to.

From 1 July 2026, the government has proposed that all employers pay super at the same time they pay salary or wages. This is yet to become law.

How can I check I’m being paid the right amount?

Check your super statements, call your super fund or log into your super account to see what’s been paid.

If you haven’t received contributions from your employer and it isn’t resolved by your payroll team at work, you can submit an unpaid super enquiry with the ATO. It is always a best practice to get on top of your wealth management.

What other things should I be aware of?

If you’re nearing retirement, another thing that changed on 1 July this year was the transfer balance cap, which limits the amount of super savings you can transfer to a retirement pension.

The cap is currently $1.9 million, or less, if you started a pension before this date.

 

Source: CFS

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