More money? – super! Compulsory Superannuation increases in Australia

It’s official. The 2021 Federal Budget has confirmed that the superannuation guarantee will increase from 9.5% to 10% on 1 July 2021 and then increase incrementally by 0.5% each year thereafter until it reaches 12% by 1 July 2025. The table below summarises the increases.

From 1 July 2021, businesses must adjust their payroll systems to make the increased minimum  contributions on behalf of their eligible workers. A failure to do so will expose the business to the higher superannuation guarantee charge (including interest and an administration fee), in addition to any ATO penalties.

Employers need to consider current employment contracts and the interaction between remuneration  and statutory superannuation and whether the extra statutory superannuation must be paid in addition to remuneration or whether it can be absorbed into the remuneration package. For workers who are already paid superannuation of 10% or more, there may not be any requirement to a further increase at this time, but again, terms of employment contracts should be closely reviewed.