Compulsory Superannuation Rate will rise to 10%
Great news for workers!
From 1 July 2021 the rate of superannuation guarantee (SG) will increase to 10%, following several years of sitting at 9.5%.
The increase in rate of superannuation will provide a boost to the retirement savings of many working Australians – after all, your super is the nest egg you will draw on in retirement and either supplement or replace the Age Pension.
What is the Superannuation Guarantee?
Your employer is required to make a contribution on your behalf, into a nominated super fund. This employer contribution, is called the Superannuation Guarantee, or SG for short, and is part of the payment you obtain from your employer.
Currently, the rate for a SG payment by your employer is 9.5%, set to increase to 10% on 1 July 2021.
Your employer must pay the SG if you are the following:
• 18 years old or over, and
• receive $450 or more (before tax) in salary or wages in a calendar month (however this threshold is likely to be scrapped in 2022).
If you are under the age of 18, you will also need to work more than 30 hours per week to qualify for the SG contribution.
The SG rate is set to increase over a number of years when in 2025/26 it will be 12%.
Date Super Rate
1 July 2021 10.0%
1 July 2022 10.5%
1 July 2023 11.0%
1 July 2024 11.5%
1 July 2025 12.0%
Employers must pay the SG at least four times a year, by the quarterly due dates.
Now would be a great time to review your employment contract as some employees may already receive more than the legal minimum superannuation contribution due to their employment contract or a salary sacrifice arrangement. The increase to 10% does not automatically mean those currently receiving extra SG will receive the increase.
Interested in boosting your super?
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