On 1 July 2021, the Superannuation Guarantee (SG) rate will rise from 9.5% to 10% – the first rise since 2014. It will then steadily increase each year until it reaches 12% on 1 July 2025.
What are the changes?
- The compulsory superannuation guarantee contribution (SGC) rate will increase on 1 July 2021 to 10% (up from the current rate of 9.5%) for all eligible employees.
- Under the recent Federal Budget, the Government announced its intention to remove the $450 threshold from 1 July 2022 to benefit low-income earners which we advise that this measure has not yet been legislated.
Who are eligible employees
Generally, all employees earning $450 or more per month (under the current rules) are eligible for SGC. Note that there are some additional eligibility rules for some employees such as those aged under 18 years. Employers should refer to the information available on the Tax Office website and their online decision tool to determine if an employee is eligible for the SGC or contact your HTA Advisor.
How will the SGC rate change impact you the employer?
Employers need to ensure their payroll systems are updated so that all eligible employees are receiving contributions at the increased rate of 10% from 1 July 2021.
Changes with Single Touch Payroll (STP)
If you have an up-to-date payroll system which complies with Single Touch Payroll (STP) these changes should be relatively simple to comply with as new employees engaged on or after 1 July 2021 will automatically be registered under these new changes.
Employers will need to ensure these changes are promptly implemented in order to avoid penalties for underpayments and/or late payments.
Note: For existing employees, employers need to check with their payroll system provider to ensure that the necessary steps are followed to update the existing employees’ details to ensure these changes are also applied to them.
Superannuation Packages to be reviewed
Superannuation salary packaging arrangements will also need to be reviewed – employers should ensure that the calculations are correct and the SG rate increase flows through.
Annual superannuation guarantee rate changes
| SG rate | |
| 1 July 2020 – 30 June 2021 | 9.5% |
| 1 July 2021 – 30 June 2022 | 10% |
| 1 July 2022 – 30 June 2023 | 10.5% |
| 1 July 2023 – 30 June 2024 | 11% |
| 1 July 2024 – 30 June 2025 | 11.5% |
| 1 July 2025 – 30 June 2026 | 12% |
Need Help?
If you would like help with the 2021 superannuation guarantee changes, or another other superannuation or employee payment obligations, please contact our office and one of our HTA advisors will be able to assist.
