Since 2014 the rate of compulsory superannuation paid to employees on their ordinary earnings has been frozen at 9.5% however, as announced in the 2021 Budget, this is scheduled to change to 10% on 1 July 2021. The rate is also set to increase by half a percent each financial year until it reaches 12% by 2025.
The increase will require some planning for business owners who have employees. The half percent increase will have an effect on the cashflow of small business. The minimum frequency of super payments to employee superfunds is Quarterly. Employers can pay super more frequently if they prefer which can ease the pressure of larger quarterly payments.
If you are currently using a program like Xero or MYOB, these statutory rates will be automatically updated. In addition, some software, like Xero, give you an automatic super payment feature. This allows you to process Super as frequently as you like with funds being direct debited from your nominated bank account. This feature makes staying on top of these obligations easy and aids with keeping cash flow healthy.
In addition to the above, the ATO is going to make it easier for employers to check/access their employees superannuation details to ensure employees aren’t signing up to a new super account every time they change jobs. This service will be accessible through ATO Online Services although we do not yet have a release date.
If you would like any further information on any of the above, please contact our office.