Changes in Superannuation Rates

What You Need to Know About Changes in Superannuation Rates

Superannuation rates in Australia are set to change, impacting how much employers contribute to their employees’ super funds. Understanding these changes is crucial for both employers and employees to ensure compliance and maximise retirement savings.

Key Changes

1. Increase in Superannuation Guarantee RateFrom 1 July 2024, the superannuation guarantee (SG) rate will increase from 11% to 11.5%. This means employers will need to contribute 11.5% of an employee’s ordinary time earnings to their superannuation fund.
2. Future Rate IncreasesThe SG rate is scheduled to gradually increase by 0.5% each year until it reaches 12% by 1 July 2025. Employers should prepare for these incremental changes and adjust their payroll systems accordingly.
3. Impact on Take-Home PayFor employees on fixed remuneration packages, an increase in the SG rate may result in a slight decrease in take-home pay as more of their total package is directed towards superannuation contributions.
4. Superannuation Contributions CapThe concessional (before-tax) contributions cap remains at $27,500 per year. Employees should monitor their super contributions to avoid exceeding the cap and incurring additional tax liabilities.
5. Additional ContributionsEmployees can make additional voluntary contributions to boost their retirement savings. These contributions can be made on a before-tax (salary sacrifice) or after-tax basis.

How to Prepare

For Employers:

• Update Payroll Systems: Ensure your payroll systems are updated to reflect the new SG rates.
• Communicate with Employees: Inform your employees about the changes and how they may affect their take-home pay and super contributions.
• Review Employee Contracts: Check employment contracts to determine if any adjustments are needed due to the change in SG rates.

For Employees:

• Check Your Super Contributions: Review your super statements to ensure your employer is contributing the correct amount.
• Consider Additional Contributions: If you can afford it, consider making additional voluntary contributions to maximise your retirement savings.
• Seek Financial Advice: Consult a financial adviser to understand how the changes impact your long-term financial planning.

Staying informed about changes in superannuation rates is essential for making the most of your retirement savings. Employers need to adjust their payroll systems, while employees should consider their contribution strategies.

For more detailed information, visit the ATO’s Superannuation page or contact Tax Accounting Adelaide for personalised advice and assistance.