Superannuation Guarantee Increase to 10.5%

Superannuation Guarantee Increase to 10.5%

Superannuation Guarantee Increase

From 1 July 2022 the superannuation guarantee (SG) rate will increase to 10.5%, an increase of 0.5%. The super rate will increase by a further 0.5% each year until it reaches 12% in 2025.

What does this mean for employers?

Super guarantee is the minimum amount an employer must pay to avoid the super guarantee charge. The rate had previously been 9.5% since 1 July 2014 but will increase as follows:

Up to 30 June 20219.5%
1 July 2021 to 30 June 202210%
1 July 2022 to 30 June 202310.5%
1 July 2023 to 30 June 202411%
1 July 2024 to 30 June 202511.5%
From 1 July 202512%

Choice of Fund Rules

Please also ensure that you are compliant with the Choice of Fund Rules which came into effect from 1 November 2021. This means that where an employee commences employment but has not nominated a super fund, the employer is required to make contributions to the employee’s existing super fund (in circumstances where they have one). Employers will be able to check with the ATO to see if the employee has an existing super account.

The purpose of this change was to prevent employees having multiple super funds and excessive account fees. By ‘stapling’ the employee’s super fund to them, their account follows them from each job and overrides the employer’s nominated default fund.

Scotia Online CIBC Online