Small Business
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Superannuation in Australia to Increase to 10.5% in July

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To our valued clients,

Starting 01 July 2022, the superannuation contribution rate will increase to 10.5 per cent. A yearly 0.5 per cent increase will also take effect at the beginning of each financial year for the next three years for a final contribution rate of 12 per cent.

Why a gradual increase?

Employers in Australia are required to pay 10% of an employee’s ordinary time earnings under the Superannuation Guarantee laws. However, due to a concern that many retirees will still rely on the Age Pension, the government legislated a gradual increase to 12 per cent by the year 2025. This aims to meet the basic needs of Australian retirees who would want an independent income.

To help businesses cope with the increase, a gradual approach was proposed. This will allow employers to plan ahead, as they only need to make small adjustments each year compared to shouldering the 2.5 per cent increase all at once.

How we can help

If you have a business or if you are an employer, you would need to take the increase into account. As part of the 2021-22 Federal Budget, the Australian government also announced that it will remove the $450 per month threshold so that employees may be covered by the super guarantee regardless of their monthly salary, provided they satisfy other super guarantee eligibility requirements.Should you have any questions, we recommend you contact one of our experts at DKM Accounting here to ensure that you are on top of the super increase.

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