Increase in Superannuation Contributions from 1 July 2023
Don’t forget that the amount of superannuation contributions for your employees will rise from 1 July 2023.
From that date, contributions at the rate of 11% of salary and wages paid to employees (and some others) need to be made to the employee’s superannuation fund. This rate will apply for the year ending 30 June 2024. The current rate of contribution is 10.5%.
This is part of the scaling up of the superannuation contribution rate to, eventually, 12% of remuneration. For the year ending 30 June 2025, the contribution rate will increase to 11.5%. In the following year, the year ending 30 June 2026, the rate will increase to 12%. After that there are no planned increases to the contribution percentage.
Whenever the superannuation contribution rate increases there can arise the question for some employers as to whether the increase in the superannuation contributions will be absorbed within the employee’s existing remuneration package. For example, an employee’s remuneration might be expressed in the employment contract as $100,000 inclusive of superannuation.
If this is the case, the employer may consider it well within the terms of the employment contract to reduce the employee’s take-home wages by the increase in the amount of superannuation contributions paid to the employee’s superannuation fund.
Calculation Of Superannuation Contributions
In other employment contract situations it may be clear that superannuation contributions are calculated at the applicable rate on a certain value of remuneration paid to the employee. This means that the extra cost of the superannuation contributions must be borne by the employer.
Enterprise bargaining agreements and the involvement of labour unions can also be relevant in making the correct decision about whether the extra cost of the superannuation contributions falls on the employer or the employee.
If there is any doubt, an employment law specialist lawyer should be consulted.
- What changed for super from 1 July 2023: https://qsuper.qld.gov.au/news-hub/articles/2023/06/06/01/08/whats-changing-for-super-from-1-july-2023
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