For small business owners and payroll managers, staying up-to-date on the latest superannuation changes is essential. And, with the Australian Superannuation Guarantee (SG) set to increase from 10.5% to 11% from 1st July 2023, it’s important to understand what this means and how it could affect your business. As an employer, this increase, and subsequent increases, will have an impact on your payroll management and accounting systems.
Here’s what you need to know about the SG increase.
What is Changing with the Australian SG and When?
Effective from 1st July 2023, the SG rate will increase to 11% of an employee’s OTE (Ordinary Time Earnings). This increase is part of a gradual, planned increase that will see the SG rate rise to 12% by 2025.
Who Will be Affected by the SG Increase?
All employers who pay their employees a wage or salary are required to make SG payments on their behalf. Therefore, all businesses employing staff in Australia will be affected by the SG increase.
The extent to which your payroll management is affected will depend on how your employment contracts are structured, most commonly being a base salary plus Super or a total remuneration package that includes Super.
What Can You Do to Prepare for the Australian SG Increase?
If you’re a small business owner or payroll manager, it’s important to start preparing for the SG increase now. Key steps you can take include:
- Reviewing your payroll systems and software to ensure they are set up correctly to calculate and apply the SG increase
- Budgeting for the increased SG payments and adjusting your cash flow projections accordingly
- Check your specific obligations on the ATO website
The Australian Superannuation Guarantee increase is an important change that will impact all businesses employing staff in Australia. We can help you understand your obligations and make sure you remain compliant so please get in touch if you need advice around this.