With the recent release of the 2020-21 Federal Budget and scheduled 0.5% superannuation increase to come into effect from the 1 July 2021, below is a snapshot of what you need to know.
- The scheduled increase to Super Guarantee (SG) contributions from 9.5% to 10%
From 1 July 2021, the new SG percentage will be 10% of your employees ‘ordinary time earnings’. This means your payroll systems will need to be adjusted to pay that amount to your eligible employees.
Ordinary time earnings (OTE) will include any commission, loadings and/or allowances received by the employee. OTE does not include overtime or reimbursements. For a full list of what is included as OTE see the ATO’s checklist.
2. Stapled Fund
Described as perhaps the biggest change for employers, this change proposes that new employees will have their super fund ‘stapled’ to them when they change jobs, unless they actively choose another fund.
The ‘stapled fund’ change will impact the onboarding process for new employees only and will mean that if a new employee notifies you of their preferred fund you must make payments into this account. In the case where a new employee doesn’t notify you of their preferred fund, you will be required to contact the ATO to see if the employee has an existing super fund. In the absence of a fund, you must then create a new account with your nominated default super fund.
Existing employees will not be affected by these changes.
3. Introduction of a new Single Touch Payroll (STP)
While employers with more than 20 employees have been using Single Touch Payroll (STP) since 1 July 2018, come 1 July 2021, all employers will have to report payroll obligations electronically (unless exempt).
For information on available exemptions see the ATO ‘Single Touch Payroll employer reporting guidelines‘.