Increase in Superannuation to 11%

18 MAY 2023

 

Employers have a duty to pay at least the minimum superannuation guarantee contributions to their employees’ superannuation fund. Currently, the minimum superannuation guarantee contribution is calculated at 10.50% of the employee’s ordinary time earnings. This rate is set to rise to 11% as of 1 July 2023 for the coming financial year.

From 1 July 2023, employers will be required to pay the minimum superannuation contribution calculated at 11% of the employee’s ordinary time earnings. Failure to do so may result in penalties being imposed on the employer.

 

Penalties

Pursuant to the Superannuation Guarantee (Administration) Act 1992 (Cth) (the Superannuation Act), employers cannot make arrangements to avoid paying the minimum contributions as they will be ordered to pay the difference.

Administrative penalties may also be imposed where a reduced superannuation contribution is made and false or misleading statements have been made by the employer.

Under the Superannuation Act, employers who do not pay the correct superannuation contributions may be required to lodge a superannuation guarantee statement or information relevant to assessing that employer’s liability to pay a superannuation guarantee charge for a quarter.

If the employer does not provide this statement, the Australian Taxation office may issue what is known as a Part 7 Penalty, which is a penalty under Part 7 of the Superannuation Act. This penalty may vary depending on the circumstances but can be charged at a rate of up to 200% of the amount of the superannuation guarantee charge payable.

 

Takeaway Message

It is important for employers to be mindful that the minimum superannuation rate is about to rise.

If you have any employment law queries or questions in relation to staff superannuation, please contact Aaran Johnson or Simon Kumar to discuss how Marsdens can assist your business.

 

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.

 

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