Employer super obligations are changing – get ready now

From 1 July 2013:

  • You need to increase the compulsory super payments you make on behalf of all your eligible employees (called 'super guarantee' or 'SG') to 9.25%. This is the first of several increases over the next seven years.
  • Make super guarantee contributions for employees who are 70 years old or over.

Start preparing now:

  • Ensure your payroll and accounting systems are able to cater for the gradual increase in the super guarantee rate and removal of the upper age limit.
  • If you have 19 or fewer employees, consider using the free Small Business Superannuation Clearing House, which lets you pay your super contributions in one transaction to a single location.

Please see the table below for the full list of planned changes between 1 July 2013 and 1 July 2019.

 

Date

Change

1 July 2013

  • Increase your employees' super   guarantee rate from 9% to 9.25%.
  • Make super guarantee contributions for   employees who are 70 years old or over.

1 January 2014

  • Employers must make super guarantee   contributions for employees who have not completed a choice of fund form to a   fund that is authorised to offer a MySuper product.

1 July 2014

  • Increase your employees' super   guarantee rate from 9.25% to 9.5%.
  • If you have 20 or more employees, use   the new data and e-commerce standard when making super contributions.

1 July 2015

  • Increase your employees' super   guarantee rate from 9.5% to 10%.
  • If you have 19 or fewer employees, use   the data and e-commerce standard when making super contributions. You can   also use the Department of Human Services' free Small Business Superannuation   Clearing house.

1 July 2016

  • Increase your employees' super   guarantee rate from 10% to 10.5%.

1 July 2017

  • Increase your employees' super   guarantee rate from 10.5% to 11%.

1 July 2018

  • Increase your employees' super   guarantee rate from 11% to 11.5%.

1 July 2019

  • Increase your employees' super   guarantee rate from 11.5% to 12%.

 

Changes to employer super obligations - at a glance

Super guarantee rate rise

The compulsory super guarantee rate will be gradually increased from 9% to 12%, over seven years. The first increase from 9% to 9.25%, will take effect on 1 July 2013.

Removal of the super guarantee upper age limit

From 1 July 2013, the existing age limit for employee super guarantee eligibility will be removed. This means you will need to start making super guarantee payments for eligible employees who are 70  years old or over.

MySuper

Employers must have a nominated fund, or 'default fund', where they make super guarantee payments for employees who have not selected a preferred fund (by completing a choice of fund form).

From 1 January 2014, employers must make these contributions to a fund that offers a MySuper product: a new, simple cost-effective super product that will replace existing default products. Super funds will be allowed to provide MySuper products from 1 July 2013, and they will provide you with information to help with the changeover from existing arrangements.

Data and e-commerce standard

The new data and e-commerce standard will reduce the time it takes to process super contributions and lower transaction costs by providing a consistent, reliable electronic method of making contributions. This means you may need to change the way your business processes super payments.

The new standard will be applicable from 1 July 2014 for businesses with 20 or more employees, and 1 July 2015 for businesses with 19 or fewer employees.

For more information about the above or to speak with one of our business and superannuation advisers, please contact Lockwood & Ward on 02 9299 7044.

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