The Superannuation Guarantee (SG) is the minimum percentage of ordinary time earnings before tax that an employer has to pay an employee (or a contractor deemed to be an employee for superannuation purposes by the ATO). It is currently 9.5% and has been at that rate since 1 July 2014.

However, it is increasing to 10% from 1 July 2021 and further annual increases are scheduled as follows:

• 10.5% from 1 July 2022
• 11% from 1 July 2023
• 11.5% from 1 July 2024
• 12% from 1 July 2025

Currently, employees who earn less than $450 per month are excluded from eligibility for the SG but the Federal Government has recently announced its intention to remove that qualification with effect from 1 July 2022.

The Superannuation Guarantee is a statutory obligation – it is mandatory and failure to meet that obligation can result in prosecution for breach of the legislation and enforceable orders for back payment of unpaid superannuation contributions.

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Need clarification on these changes?

Contact us at enquiries@ridgelinehr.com.au if we can be of assistance.