Paying superannuation for your employees

As of 1 July 2023, employers must contribute 11.0% of their employees' ordinary time earnings to their super accounts (up from 10.5%).

The contributions will increase to 11.5% for the 2024-25 financial year and to 12.0% for the 2025-26 financial year.

?You must make this contribution for:

• Employees who are 18 years old or older, regardless of how much they earn
• Employees younger than 18 years old who work at least 30 hours a week for you
• Contractors that offer a personal service (but only on the labour component)

Contribution limits

Employers are only required to contribute up to a limit – known as the maximum super contribution base.

For the 2023-24 tax year, the new maximum is $62,270 per quarter (up from $60,220 for the 2022-23 tax year).

Forthcoming changes – payday super

Currently employers can pay the super contributions quarterly, this set to change.

On 2?May 2023 the Australian Government announced ‘Payday Super’ and that from 1 July 2026 employers, will have to pay the super contributions at the same time they pay their salaries and wages.

The federal government hopes this change will:

• ?Help employees keep track of their contributions
• More frequent super payments makes employers’ payroll management smoother with fewer liabilities building up on their books
• Increase employees' retirement savings because the sooner the money is deposited, the more time it has to grow or generate an income

The 1 July 2026 start date will provide employers, super funds, payroll providers and other parts of the superannuation system with sufficient time to prepare for the change. At the time of writing, this measure is not yet law.

Super checklist

You and your employees could consider completing the Australian Taxation Office’s five-step super health check:

1. Check your contact details on MyGov.
2. Check if your contributions are being paid into the right account.
3. Check for lost and unclaimed super (this can happen when you change jobs, and your new employer pays into a different super account).
4. Check if you have multiple super accounts and consider consolidating them (speak to a financial adviser as there may be different benefits and insurance policies).
5. Check your nominated beneficiary because this is probably not covered by your will. Binding nominations expire every three years.

Accounting Excellence can help you with all your payroll taxes, including super contributions. Get in touch by emailing [email protected] or calling 0431 981?005.

?