On 1 July 2021, the Australian government increased the minimum superannuation contribution rate by 0.5%. The increase will help stimulate Australia’s post-pandemic economy and support a better retirement for eligible workers.
Effective 1 July 2021, employers’ contributions to the Superannuation Guarantee (SG) increased from 9.5% to 10% of employees’ wages, up to a quarterly limit of AUD 55,270. Employers are not mandated to contribute to the SG for the portion of the employee’s earnings above the quarterly limit – also known as the maximum superannuation contribution base.
Therefore, the maximum mandatory SG contribution per quarter increased from AUD 5,250.65 based on an employer’s contribution rate of 9.5% of employees’ wages to AUD 5,527 based on the increased employer’s contribution rate of 10% of employees’ wages.
Employers should review their contribution rates and update their payroll and accounting systems accordingly. Employers may use the Australian government’s SG contribution calculator to determine their new contribution rate for eligible employees. Employers should be aware that the SG rate is scheduled to increase by 0.5% each year until it reaches 12% of employees’ wages in July 2025.