As a business owner, it’s essential to stay up-to-date with changes to legislation that can affect your operations. The superannuation guarantee statutory rate rise is one such change you must be aware of.
The superannuation guarantee statutory rate will rise to 11% in July 2023. It will increase by 0.5% each year until July 2025. At that time, the rate will reach 12% as legislated. This change will impact your business’s finances, and it’s essential to start preparing now to avoid any unpleasant surprises.
Here are some steps you can take to prepare for the rate rise:
Review current super costs for all employees.
It is essential to understand your current superannuation expenses and how the rate rise will impact them. This review will help you calculate the revised payroll costs from July, showing the current wages and superannuation expenses compared to the new rate from July. Highlighting the increased amount per month or quarter will help you know the impact.
Review any salary packaging arrangements.
If you have salary packaging arrangements, you must review the contract’s wording to ensure you apply the changes correctly. This change may also impact annualised salary arrangements, so reviewing these arrangements is crucial.
Discuss the super rate increase with employees.
Let your employees know that there will be an increase of 0.5% each year until July 2025, when the SG rate will reach 12% and remain there. This will help manage their expectations and avoid surprises when the change occurs.
Plan for higher payroll expenses from July.
Short or late payments of super contributions can incur hefty penalties, so it’s essential to plan now for higher payroll expenses from July. Getting organised now means you’ll be well prepared for your business’s increased costs when the first payment is due later this year.
Seek professional help if needed.
If you need clarification on the superannuation guarantee statutory rate rise or help review your payroll costs and employee agreements, talk to one of our specialist accountants today. We can provide accurate reports to make planning for the rate rise easy.
The superannuation guarantee statutory rate rise will impact your business’s finances, and it’s essential to start preparing now. Review your current superannuation costs, discuss the rate increase with your employees, and plan for higher payroll expenses from July. Seek professional help if needed, and you’ll be well-prepared for the change when it comes into effect.