From 1 July 2023, the rate will rise to 11%. From then on, the rate will increase by 0.5% each year until July 2025 when it will reach the legislated 12%.
Prepare Now for the July Rate Rise
Have your Xero payroll templates set up, so that superannuation is calculated at the statutory rate so that the process is automatic.
Review your current superannuation costs for all employees, both hourly and salaried.
Review any salary packaging arrangements. Is the agreement inclusive of superannuation or is super paid on top of the agreed salary?
For salary packages inclusive of super, you will need to check the contract's wording to make sure you apply the changes correctly. This change may also impact annualised salary arrangements.
Calculate your revised payroll costs from July, showing the current wages and superannuation expense compared to the new rate from July 2021. Highlight the increased amount per month or quarter, so you know precisely what the impact will be.
Discuss the super rate increase with your employees now. Let them know that this is the first year since 2014 that the rate has risen and that unless the law changes, there will be an increase of 0.5% each year from now until July 2025 when the statutory rate will reach 12%.
Remember – short payment or late payment of super can incur hefty penalties – plan now for higher payroll expenses from July, so you don't get caught short.
Need help with making sure Xero is setup correctly to calculate superannuation, or need help with reviewing payroll costs and employee agreements?
This post was originally published by BOMA and has been updated for freshness, accuracy, and comprehensiveness