As an employer, the Super Guarantee (SG) legislation requires you to pay superannuation contributions on behalf of your employees. The current SG rate is 10% of your employees’ Ordinary Time Earnings (OTE), however this is scheduled to increase to 10.5% from 1 July 2022.
The scheduled SG increase to 10.5% will be going ahead. It is legislated to increase by half a percent each year until it reaches 12% in 2025.
The timetable of SG increases is outlined below:
|1 July 2021 – 30 June 2022||10.00%|
|1 July 2022 – 30 June 2023||10.50%|
|1 July 2023 – 30 June 2024||11.00%|
|1 July 2024 – 30 June 2025||11.50%|
|1 July 2025 onwards||12.00%|
As an employer it’s important to ensure you pay super at this new minimum rate as there are financial penalties for missed or late SG payments.
How much to pay?
SG is the minimum super an employer must pay their employees. From 1 July the minimum super that must be paid to an eligible employee will be 10% of their ordinary time earnings – the amount an employee earns for their ordinary hours of work.
To work out how much you need to pay your employee, calculate the employee’s OTE for the quarter and multiple by the SG rate.
When to make SG payments?
You can make SG payments weekly, fortnightly, monthly or quarterly. There are deadlines for quarterly payments.
|Quarter||SG payment due date|
|Q1 - 1 July to 30 September||28 October|
|Q2 - 1 October to 31 December||28 January|
|Q3 - 1 January to 31 March||28 April|
|Q4 - 1 April to 30 June||28 July|
High income earners
For high income earners, it’s important to know that each year the government sets a quarterly cap on the amount of an employee’s income on which their employer must make SG contributions.
This amount is called the maximum super contribution base (MSCB) and it’s indexed to average weekly ordinary time earnings (AWOTE), so it changes every financial year.
For 2022-23 the maximum super contribution base has increased to $60,220 per quarter.
Help and support
Get ahead and book a session
with one of our Business Development Managers to help you through these increases.
Our team of real estate focused super experts are here to help advise and answer those tricky questions. All our Business Support Team services are free.
Get in touch, we’re here to help.
The information contained in this article does not constitute financial product advice. REI Super does not give any warranty to the accuracy, completeness or currency of the information provided. Although REI Super makes every reasonable effort to maintain current and accurate information, you should be aware that there is still the possibility of inadvertent errors and technical inaccuracies. REI Superannuation Fund Pty Ltd ABN 68 056 044 770, AFSL 240569, RSE L0000314 Trustee of REI Super (ABN 76 641 658 449), SPIN REI0001AU, RSE R1000412. MySuper unique identifier 76641658449129. May 2022.