Superannuation Guarantee update
As of 1 July 2021, the “Superannuation Guarantee” will be increasing from the current 9.5% to 10%. This means that by law, all employers will need to be paying 10% of eligible employees’ earnings from 1 July 2021 to their nominated superannuation fund.
Generally speaking, superannuation eligibility extends to full time, part time and casual employees who are over 18 years of age and earn more than $450 a month. More info on eligibility can be found on the ATO website.
Employee communication and budgeting
It will be important to identify and communicate this news to employees who are paid on a “superannuation inclusive package” as this may mean that their take-home income will reduce.
While it may seem welcome news to employees who are paid their superannuation on top of their income, employers will need to budget for this increased cost to the business.
Paying on time
As an employer, in order to ensure your superannuation processes are compliant with this change, it is important to have updated your payroll systems prior to the first pay run following 1 July 2021. With data-matching facilities in place, the ATO will be monitoring compliance and enforcing penalties so we strongly suggest preparing now for the change.
If you need guidance on the how to update your processes or budget for the upcoming change, please feel free to contact us and we can advise the best way forward for you and your business.
Why is this happening?
The Federal Government put this increase in place to ensure Australians accumulate more superannuation for retirement and decrease the dependence on pensions.
This update forms part of a greater scheme to gradually increase mandatory superannuation contributions to 12% by 1 July 2027. The increase dates can be found here.
2021 Jobkeeper due dates & action required
Along with the new year comes the last extension of the JobKeeper 2.0 scheme which is currently running. It is active from Monday 4 January 2021 and will end on Sunday 28 March 2021.
The eligibility requirements and the enrolment process is different to the previous scheme which took place in 2020.
- Businesses new to JobKeeper will be required to complete the necessary steps to register for the scheme by Sunday 31 January 2021.
- Businesses previously enrolled for JobKeeper will have until Sunday 14 February 2021 to register for the scheme for the initial payment related to January 2021.
- All eligible businesses will also need to meet the wage payment conditions by 31 January 2021. More detail available here.
Need our help?
If you would like our assistance in applying for the current 2021 scheme please get in touch as possible so we can ensure you receive the maximum benefits available.
Feel free to contact us for more information.
Free ATO webinars for business
If you are thinking about starting a new business, have just started a new business or want to update your knowledge, then the ATO’s small business webinar series is for you.
With 15 different sessions each running for approximately 45 minutes, there’s a range of topics including Single Touch payroll – Introduction and Reporting, Introduction to tax basics, Introduction to tax deductions and many more. There are typically six sessions per day, so there’s likely to be a time that suits you.
Click here for more information: https://www.ato.gov.au/General/Webinars/Small-business-webinars/