Employers get ready - Super increases to 9.5% from 1 July

Superannuation Guarantee (SG) is the official term for compulsory superannuation contributions made by employers on behalf of their employees. An employer, regardless of whether they are a small or large business, must currently contribute the equivalent of 9.25% of an employee's ordinary times earnings - note you are not obliged to pay superannuation on overtime provided you pay the amount to the employee's fund on time.

As part of the increase to SG over the coming years, the rate increases from 1 July 2014 to 9.5%.  Don't forget to change your payroll software after you complete your payroll year close on 30 June 2014.

The Labor government originally passed an aggressive increase schedule to reach its 12% target by 2019, however the current government has slowed the increases to a more manageable stall for the next 3 years followed by a 0.5% increase per year from 1 July 2018.  By this schedule, employers will reach a 12% obligation on 1 July 2022.

Financial Year  SG Rate
2014/15 9.50%
2015/16 9.50%
2016/17 9.50%
2017/18 9.50%
2018/19 10.00%
2019/20 10.50%
2020/21 11.00%
2021/22 11.50%
2022/23 12.00%

We also remind you that from 1 July 2013, there is no longer the 70 year old upper age limit for making SG contributions.  Employers must make SG contributions on behalf of ALL employees regardless of age.