How to prepare for the 11% Superannuation rate as of 1st July 2023
For business owners, it’s important to be aware of the upcoming change to the superannuation guarantee rate, so you don’t find yourself facing unexpected costs or penalties. From July 2023, the rate will jump to 11%, and then rise by 0.5% annually until it reaches the legislated 12% in July 2025. In this blog post, we’ll guide you through what you need to do to prepare for the July rate rise.
- Review your current Superannuation costs
Get a clear picture of your current superannuation costs. Examine your payroll records from the last year and make sure your hourly and salaried employees are paid the correct amount based on the current rate of 10.5%. That way, you’ll know what kind of impact the rate rise will have on your cash flow. - Review any salary packaging arrangements
Take a look at any salary packaging arrangements you have in place. Make sure to check the contract wording on any agreement that includes superannuation rates, and consider how the change affects annualised salaries. Any employee receiving an annualised salary could be affected by the rate rise. - Calculate your revised payroll costs
Calculate your revised payroll costs from July, so you’ll know exactly how much your payroll expenses will increase. Highlight the new amount, whether that be monthly or quarterly, to ensure you set aside the necessary funds to meet your superannuation obligations. - Discuss the super rate increases with your employees
Let your employees know now that come July, the rate will increase by 0.5% annually until it reaches 12% in 2025. This way, they won’t be caught by surprise on their payslips. - Plan for higher payroll expenses now
Late or short payment of superannuation can attract hefty penalties, so plan ahead now for higher payroll expenses from July.
Feel free to reach out to our team if you need any help reviewing your payroll costs and employee agreements. We can help you develop an accurate plan to ensure you’re ready for the upcoming changes.
The bottom line is that the sooner you begin preparing for the July rate rise, the better off your business will be. Review your current superannuation costs, salary packaging arrangements, and payroll costs before July to make sure you’re meeting your superannuation obligations and avoiding any unwelcome surprises.
