Super Guarantee Rate & Eligibility Changes From 1 July 2022

Super Guarantee Rate & Eligibility Changes From 1 July 2022

The money paid by employers to eligible workers for their retirement benefits is called Superannuation, and Super Guarantee (SG) is the minimum amount that must be paid to avoid the super guarantee charge.

The minimum percentage paid as the guarantee is 10% of an employee’s ordinary time earnings.

From this coming 1 July 2022, all employers will need to pay super for employees, no matter how much you pay them or how much they earn.

This decision is the outcome of the removal of the $450 per month threshold for Super Guarantee (SG) eligibility.

Other Eligibility Requirements For Super Guarantee

  • The eligibility criteria for Super Guarantee remain the same other than the removal of the threshold amount. All workers under the age of 18 still need to work more than 30 hours in a week to become eligible for a guarantee amount.

    Super Guarantee is determined by when the employees are paid salary, not by when they earn income.

    It means, if an eligible employee is paid on or after 1 July 2022, the new rules will apply to the full amount. This applies even if the pay paid is related to the period before 1 July 2022.

Super Guarantee Rate Increase Introduced

  • Along with a change in eligibility criteria, the other major change introduced is the increase of rate in the Super Guarantee from 10% to 10.5%. This will be applicable from 1 July 2022.

    For Norfolk Island, the transitional Super Guarantee rate will increase from 6% to 7%.

    The rate you’re required to adopt for the guarantee charge depends on when your employee is paid. The new rate will apply to all payments made on and after the allocated date.

    To stay prepared for the changes and avoid any errors, consider taking the assistance of a tax accountant. Also, cross-check your payroll and accounting systems to make sure they are up-to-date.

    If you are looking for a tax agent in Dandenong to handle your Super Guarantee, our team at KPG Taxation can assist you right away.

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