Superannuation Guarantee Changes

From 1 July 2022 there will be Superannuation Guarantee (SG) changes that will impact you and your employees.

Super Guarantee Rate Increase

The super guarantee rate will increase from 10% to 10.5% on 1 July 2022. You will need to use the new rate to calculate superannuation on payments you make to employees on or after 1 July. The new rate will need to be applied even if some or all of the pay period is for work done before 1 July. Please also note that the SG rate is legislated to increase to 12% by 2025.

No Superannuation Guarantee Threshold

From 1 July 2022, employees can be required to pay the super guarantee for employees, regardless of how much they earn. This is because the $450 per month threshold for when SG is paid is being removed. You only need to pay super for workers under 18 when they work more than 30 hours in a week.

Company Tax Rate Changes

Separately for company tax payers that are considered base rate entities, for the 2021–22 income year, companies that are base rate entities must apply the 25% company tax rate. The tax rate for base rate entities has reduced from 26% in the 2020–21 income year.

A company is a base rate entity for an income year if:

  • the company’s aggregated turnover for that income year is less than the aggregated turnover threshold for that income year ($50m in 2021-2022), and
  • it has 80% or less of their assessable income in that income year that is base rate entity passive income – this replaces the requirement to be carrying on a business from the 2017–18 income year onwards.

The full company tax rate of 30% applies to all companies that are not eligible for the lower company tax rate.

This post is provided by Prime Accounting and Business Advisory Pty Ltd. Liability limited by a scheme approved under Professional Standards Legislation. This post is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this post. All information is subject to change without notice. We and each party providing material displayed in this post disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of information or material in this post. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.


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