On 1 July 2021, the Superannuation Guarantee (SG) rate will rise from 9.5% to 10%.

From 1 July 2021 employers will need to update their payroll settings to reflect the 0.5% increase in the SG rate and, importantly, both employers and employees will need to consider the potential increased SG costs of these changes going forward.

The effect of the increase on particular salary packages need to be carefully considered to determine whether the additional 0.5% SG contribution needs to be added on top of the existing salary package (i.e. no change to the employee’s take home pay) or incorporated into the existing salary package amount (i.e. resulting in a reduction of the employee’s take home pay). In addition, employers will need to consider the effect of the increase in the SG rate on relevant employee awards.

Note - even if there is no salary increase, the employee cost to the business will increase by 0.5%, being the increase in the SG.

Further increases of 0.5% per year are to come from 1 July 2022 until it reaches 12% from 1 July 2025 onwards.

We will keep you updated on the rate increases as the time comes so you are aware and can correspond with your employees as well, should they have any questions with regard to this.

Speak to your HLB adviser or contact me directly if you have any queries.

Kim Kelloway

Head of Clients & Markets
E: kkelloway@hlbnsw.com.au
P: 02 9020 4285