July 1 saw the introduction of two important changes to your super guarantee obligations. If you haven’t made these changes yet, you need to implement them now. They are:
ONE: The $450 super eligibility threshold has been removed
Staff who are 18 years or older and earn less than $450 per month are now eligible to receive super guarantee payments.
If you have staff who are under 18 and working more than 30 hours per week, they are also eligible to receive the super guarantee, even if they earn less than $450 per month.
TWO: Super guarantee contributions have increased
The super guarantee has increased to 10.5% of ordinary time earnings. However, the way this affects your business’ wage costs will depend on the employment agreements and/or the modern awards of your employees. For example:
- If you have staff on salary packages that include higher super contributions than the super guarantee limits, you need to obtain advice on whether the agreement wording requires you to pay a higher super contribution;
- Importantly, employees covered by modern awards will have super exclusive remuneration so the increased super guarantee contributions will be an additional expense to your business.
Stapled Super is here
Stapled super was introduced on 1 November last year. It means you need to make all super guarantee contributions into a new staff member’s existing superannuation fund. In other words, a super fund comes with every new employee.
If the new employee is unable to provide their stapled superannuation details, you can request it from the ATO. You will find the link here.
Don’t forget the minimum wage also increased from July 1
For most industries, the national minimum wage increased by 5.2% (or $40 per week). This increase applies to all employees not covered by a modern award or registered agreement. This brings the new National Minimum Wage to $812.60 p/w (or $21.38 p/h).
The exceptions to this increase are adults working under aviation, tourism or hospitality awards. Their increase doesn’t come into effect until 1 October.
Getting it wrong is costly
While it’s human to make mistakes, when it comes to underpaying staff, employers risk significant penalties and other charges. The key to avoiding problems is to understand the awards and the employment agreements for each employee. This takes time and a thorough understanding of your obligations as an employer.
But that’s where End2end Business Solutions can help. We are skilled at developing employment agreements and interpreting modern awards. We can also assist you with developing industrial relations strategies to support your business objectives and competitive, equitable compensation programs.
To learn about the ways we can support your business, call 02 8977 4002.