Increase to superannuation contributions from 1 July 2023

The Superannuation Guarantee legislation, comprising the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Guarantee Charge Act 1992 requires employers to make minimum superannuation contributions on behalf of their full-time, part-time and casual employees, with some exceptions.

Which employees receive contributions?

All employees except for certain limited categories of employees receive superannuation. These exceptions are:

• Employees under 18 years of age working for not more than 30 hours per week
• Some foreign executives who hold certain visas or entry permits
• Resident employees paid by non-resident employers for work done outside Australia
• Foreign executives with Class 2 temporary entry permits (Code 413) Schedule 3 Migration Regulations
• Employees paid to do work of a domestic or private nature for not more than 30 hours a week e.g. part-time nanny or housekeeper

Previously an exception also applied to employees receiving less than $450 in a month. This exception was removed effective from 1 July 2022.

Apart from the specified exclusions, the rules, obligations and entitlements under the Superannuation Guarantee (SG) legislation apply to all employees.

What contribution rate applies?

Superannuation contribution rates have been increasing by 0.5 percent each financial year since 1 July 2021.

Subject to the exemptions outlined above, employers must make minimum contributions generally based on an employee’s ordinary time earnings. The table below outlines previous and future rates:

When and how do superannuation increases get paid?

Superannuation increases will apply on the date that the employees are paid their wages.

This means that if an employee’s pay period spans across two financial years, the 11% superannuation increase will only apply to any wages that are paid after 1 July 2023.

If an employee is paid wages before 1 July 2023, then superannuation will remain at 10.5%.

If an employee is paid wages after 1 July 2023, then superannuation will be paid at 11%.

Example:

Henry is paid fortnightly and his employer’s final pay run for the 2022-2023 financial year will end on 4 July 2023.

As Henry’s wages for the relevant fortnight will be paid after 1 July 2023, the superannuation contribution will be 11% for the whole period.

Where can I find more information?

This article on the ATO Community page contains some helpful information: Super guarantee set to rise on 1 July | ATO Community

Employers can also contact their accountant or the ATO.