Our Employment Lawyer works closely with our Accountants and can assist you in navigating your obligations.
Commencing 1 July 2023, Australian workers can expect a boost to their retirement savings as the Super Guarantee increases to 11%. This incremental rise is part of a planned series of annual increases aimed at securing a better financial future for employees. The Super Guarantee will continue to rise by 0.5% each year on 1 July until it reaches 12% in 2025.
This increment ensures that Australians will receive higher contributions to their superannuation funds, intending to provide a better foundation for their retirement savings. The phased increase allows businesses and employers to adjust to the higher contribution rate over time, minimising any potential adverse impacts on their operations.
One of the key reasons behind this increase is to tackle the issue of unpaid superannuation. With an estimated $5 billion per annum year in contributions going unremitted by employers. To combat this predicament, a significant change will take place from 1 July 2026. Employers will be required to pay their employees’ superannuation at the same time as their salary and wages.
Benefits of Frequent Super Payments:
This alteration will have several advantageous outcomes. Foremost, it will streamline the monitoring of super payments, ensuring that employees to receive their entitled retirement savings. With superannuation being paid simultaneously with salary and wages, employees can have greater confidence in the security of their retirement funds.
With the new system, these individuals will experience faster compounding returns, potentially resulting in higher investment gains. Furthermore, it mitigates the risk of businesses accumulating significant super contribution liabilities, as payments will be made more regularly throughout the year.
Fortifying the ATO’s Role in Ensuring Compliance:
Recognising the importance of robust enforcement, the government has allocated $40 million in funding to the Australian Taxation Office (ATO) to enhance its efforts in addressing non-compliance with superannuation obligations. With increased funding and resources, the ATO will have a greater capacity to monitor and enforce superannuation compliance. Stronger targets for the recovery of unpaid super amounts will also be implemented, ensuring that employers fulfil their responsibilities and employees receive their entitled superannuation contributions.
What to be aware of
As an employer, you may seek accounting assistance to navigate the intricacies of managing payroll and super obligations. Additionally, with these changes coming into effect, it is vital employment contracts are reviewed and updated. This proactive approach can aid businesses avoid penalties, legal issues, and reputational damage, while fostering a positive work environment and maintaining trust with employees.
Where to start
At Greenhalgh Pickard we have integrated legal and accounting services. Our Employment Law team can assist you in updating your employment contracts while our Accountants can help you navigate the complexities of payroll, tax returns and super obligations.
Contact our team today
The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.