Did you know Super guarantee rate rise 11% – SG rate is based on when employee is PAID and NOT Earned?
On 1 July 2023, the super guarantee rate will rise from 10.5 per cent to 11 per cent. Some pay periods will cross over between June and July when the rate changes.
The ATO advises that the percentage employers are required to apply is determined based on when the employee is paid, not when the income is earnt.
The rate of 11 per cent will need to be applied for all salaries and wages that are paid on and after 1 July 2023, even if some or all of the pay period it relates to is before 1 July 2023
That means, if the pay period ends before 30 June, but the pay date falls on or after 1 July, the 11 per cent rate applies on those salary and wages which are ordinary time earnings.
The date of salary and wage payment determines the rate of super guarantee payable, regardless of when the work was performed
For example, if the work was done:
- in June (or partly in June and partly in July) but employees were paid in July, the rate is 11 per cent and contributions totalling 11 per cent of the employee’s ordinary time earnings for the September 2023 quarter must be made to the employee’s super fund by 28 October
- in July but employees were paid in advance (before 1 July), the rate is 10.5 per cent and contributions totalling 10.5 per cent of the employee’s ordinary time earnings for the June 2023 quarter must be made to the employee’s super fund by 28 July.
Example: Working out the correct super contribution rate – fortnightly pay period
Peter employs Sue. For the pay fortnightly pay period ending 27 June 2023, Sue’s ordinary time earnings are $3,000. Peter pays Sue on the 1 July 2023 – the minimum super contribution for Sue for the pay period is:
$3,000 × 11% = $330
Peter contributes $330 for the July – September quarter to Sue’s super fund by the quarterly due date, which is 28 October 2023.
Example: Working out the correct super contribution rate – fortnightly pay period crossing over financial years
Peter employs Sue. For the fortnightly pay period starting 24 June 2023 and ending 7 July 2023,
Sue’s ordinary time earnings are $4,500. Peter pays Sue on 8 July 2023 – the minimum super contribution for Sue for the pay period is:
$4,500 × 11% = $495
Peter contributes $495 for the July – September quarter to Sue’s super fund by the quarterly due date, which is 28 October 2023.
Example: Working out the correct super contribution rate – monthly pay period
ABC Pty Ltd employs Neil and pays a monthly salary. For the monthly pay period starting 21 June 2023 and ending 20 July 2023, Neil’s ordinary time earnings are $6,200. ABC Pty Ltd pays Neil on the 6 July 2023 – the minimum super contribution for Neil for the pay period is:
$6,200 × 11% = $682
ABC Pty Ltd contributes $682 for the July – September quarter to Neil’s super fund by the quarterly due date, which is 28 October 2023.