With the new financial year almost upon us, there are several upcoming changes that employers need to be aware of.
Compulsory superannuation guarantee payments
From 1 July 2022, the superannuation guarantee contribution rate will increase by 0.5% to 10.5% for all employees.
This follows the change last year to increase the rate to 10%. There are currently increases scheduled each financial year through to 1 July 2025. Employers should review their employment agreements to determine the impact on employees’ take-home pay (i.e. whether the employer absorbs the cost of the increase, or the increase reduces the employees’ net pay).
Employers should also review their software to ensure all employer super rates have been updated to 10.5%, or if their software will update the rate automatically. We note that employers using customised super payroll categories and MYOB users had to make this change manually for the last increase in the guarantee rate.
Abolishing the $450 threshold
The Government announced in the Federal Budget last year the abolishment of the $450 de minimis threshold for superannuation guarantee contributions. This announcement has recently become legislation and will be effective from 1 July 2022. The change means that any employee over 18 years old must be paid super at 10.5% of ordinary time earnings (OTE). We note domestic employees such as nannies have an additional eligibility requirement to work more than 30 hours in a week.
Employers need to review their records to ensure they have a superannuation choice form with up to date member details for all employees. We note that super stapling rules that were introduced on 1 November 2021 provide guidance on how to pay super contributions. More information on super stapling can be found in our previous article. Again, employers should review their software to ensure settings for the employer super payroll categories are updated.
Single Touch Payroll (STP) Phase 2
We note that MYOB and Xero continue to roll out updates to their payroll software in order to implement changes required for STP Phase 2. Both software providers have received a deferral to 1 January 2023 for their users to start reporting via STP Phase 2.
You will be prompted within your software when updates are ready and if you are required to enter any additional information.