As the new financial year approaches, it’s essential to stay informed about the latest changes to the Super Guarantee (SGC) rates. Effective from July 1, 2023, the SGC rate is set to increase from 10.5% to 11%. This is another crucial step in the scheduled increases to the SGC, which is a mandatory system of superannuation support that employers must provide to their employees.
Understanding the Super Guarantee Rate Increase
Firstly, let’s delve into what this change means. The Super Guarantee is the minimum percentage of each eligible employee’s earnings that employers must pay into a superannuation fund. The increase in the SGC rate from 10.5% to 11% means employers will need to contribute slightly more to their employees’ super funds from July 1, 2023.
Managing the Super Guarantee Changes
Set Your Super to the Statutory Rate
One of the most effective ways to manage these changes is to set your super to the statutory rate. Here’s why:
- It saves time: You won’t need to manually update your super rate with each increase.
- It ensures compliance: Your super contributions will automatically adjust to the current legal requirement, ensuring you always meet your obligations.
Report and Pay Your Super Before June 30, 2023
Another critical point to remember is the timing of your super contributions. To enable a full tax deduction for the 2022/2023 financial year:
- Report and pay your super before June 30, 2023.
- By doing this, your contributions will count for the current financial year, ensuring you can claim the full tax deduction you’re entitled to.
Guidelines for Xero Users
If you’re using Xero’s Auto Super feature, there are specific recommendations that you need to adhere to:
- For the 2022/2023 financial year, your super batches must be approved by the authoriser no later than 2:00 pm AEST, June 14, 2023.
- This ensures there’s enough time for the payments to be debited and forwarded to the super funds by June 30, 2023, enabling you to claim a deduction for your superannuation payments.
Finalising Your Single Touch Payroll Data
Single Touch Payroll (STP) is an essential part of meeting your tax and super obligations. The STP system allows employers to report their employees’ tax and super information to the Australian Taxation Office (ATO) each time they run their payroll.
Importance of Finalising STP Data
When you finalise your STP data:
- You’re declaring to the ATO that you’ve met your reporting obligations for the financial year.
- This process is a critical part of your end-of-year tasks, so it’s essential to familiarise yourself with it.
The increase in the SGC rate and the fast-approaching end of the financial year make this a critical time to ensure you’re on top of your super obligations. With the SGC rate set to rise to 11% from July 1, 2023, there’s no better time to review your super settings and make sure you’re prepared for the change.
Here are the main points to remember:
- Set your super to the statutory rate to automatically adjust with each change.
- Report and pay your super before June 30, 2023, to claim a full tax deduction for the 2022/2023 financial year.
- If you’re using Xero’s Auto Super feature, ensure your super batches are approved by no later than 2:00 pm AEST, June 14, 2023.
- Familiarise yourself with how to finalise your Single Touch Payroll data to fulfil your reporting obligations to the ATO.
By setting your super to the statutory rate and staying informed about key dates and changes, you can ensure a smooth transition into the new financial year and remain compliant with your super obligations. As always, if you need more help understanding these changes or managing your super, consider seeking advice from a professional financial advisor or accountant.