From 1 July 2021, the Superannuation Guarantee (SG) rate will rise from 9.5% to 10% and the non-concessional cap will increase from $25,000 to $27,500.
|Superannuation Guarantee rate||9.5%||10%|
Employers will need to ensure their payroll systems are updated to reflect the following changes:
- 0.5% increase in the SG rate and carefully consider the impact this may have on salary packages, and
- $2,500 increase for the higher concessional cap for employees who choose to maximise their super contributions.
Individuals who are under 65 years old, may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap ($110,000 from 1 July 2021) in a single year. It is important to note that if an individual enters into a bring forward arrangement before 1 July 2021, they will not have access to any additional cap space as a result of the increase to the non-concessional cap.
In addition, employers will need to consider the effect of the increase in the SG rate on relevant employee awards.
The government is also planning to increase superannuation rate into future years with a 0.5% increase from 1 July 2022 until it reaches 12%. What does this mean for employers? Well, the cost of doing business will increase by that same amount.
We will keep you posted with the rate changes in the new year and reach out to those employers who
If you have any questions, reach out to the FSCO team and we should be able to assist you with any queries regarding this.