The statutory superannuation guarantee rate is set to increase to 11% in July 2023 and will continue to increase by 0.5% annually until it reaches the legislated 12% in July 2025. This increase may impact your business’s payroll expenses and salary packaging arrangements.
Here are some steps to help you prepare for the upcoming changes:
- Review your current superannuation costs for all employees, both hourly and salaried.
- Review any salary packaging arrangements to determine if they are inclusive of superannuation or if super is paid on top of the agreed salary.
- For salary packages inclusive of super, review the contract’s wording to ensure the changes are applied correctly. This may also impact annualised salary arrangements.
- Calculate your revised payroll costs from July, showing the current wages and superannuation expenses compared to the new rate from July. Highlight the increased amount per month or quarter to understand the impact.
- Discuss the super rate increase with your employees now. Let them know that there will be an increase of 0.5% each year from now until July 2025, when the statutory rate will reach 12% and remain there.
- Remember that short or late payment of super can result in hefty penalties – plan now for higher payroll expenses from July so you don’t get caught short.
By getting organised now, you’ll be well-prepared for the increased costs when the first payment is due later this year. If you need help reviewing payroll costs and employee agreements, contact the team, and we’ll make sure you have accurate reports to make planning for the rate rise easy.