09 May 2012
The Increase to Employer Superannuation Contributions
The minimum level of employer superannuation contributions is the Superannuation Guarantee (“SG”) ‘charge percentage’ applied to each eligible employee’s ordinary time earnings.
The SG 'charge percentage' is currently 9%.
The Superannuation Guarantee (Administration) Amendment Act 2012 ("Amendment Act") was assented to on 29 March 2012 and, subject to the commencement of a number of other acts, will commence on 1 July 2013.
The Amendment Act gradually increases the SG charge percentage each year, to reach 12% in 2019-20.
The first increase will change the SG charge percentage to 9.25% and will apply from 1 July 2013. The full timetable of increases is as follows:
Employer superannuation contributions are payable by the employer. The Amendment Act makes no provision as to offsetting or absorbing the cost of the increases. Therefore, the ability of employers to offset or absorb the cost of the superannuation increases will depend on the way in which a relevant contract of employment, enterprise agreement or Award provides for superannuation and for future salary increases. The period of time between now and the first increase and the lead into the next financial year present opportunities for employers to seek to ensure that their contracts and agreements are suitably worded so as to enable the offsetting and absorption of the increases. Please contact us for assistance in this regard.
This artice was written by Michelle Dawson, Senior Associate - M+K Workplace Relations Team.
National Workplace Relations Contacts:
Victoria - Sam Eichenbaum, Principal New South Wales - Lesley Maclou, Principal Queensland - Stephan Gifford, Principal Tasmania - Audrey Mills, Principal
