Rohini chiluvuri, 3 JUL 2022
Removing the $450 per month threshold for super guarantee eligibility
THIS ARTICLE APPLIES TO AUSTRALIA ONLY
It's pretty simple really. From 1 July 2022, employers must make super payments to employees for every dollar they earn.
The old rule was employees received super only when they earned more than $450 per month. Which was a poor piece of legislation because it created administrative overhead for payroll officers who had to be aware when employees crossed the threshold and then backwards calculate what was owed.
The new rule is clear. It's simple to administer (you don't need to tally up their earnings any more). And it's kinder to the lowest paid employees (and that's always a good thing).
To implement, just apply super in each pay run. As this is the removal of a rule, you can now treat low paid employees just like every other employee.
Let's look at some data and see how it applies. If an employee earned $500 in a month, they receive super. If they earned $400 per month, they receive super. If they earned $10 they receive super. If they earned $1 they receive super.
If you want to read the Australian Taxation Office's ruling, you can click here.
If you liked this article, can I ask you to please share on social media and subscribe to my mailing list below. Thank you, it means so much to me to have people read my articles. Have a great day, Rohini.
It's pretty simple really. From 1 July 2022, employers must make super payments to employees for every dollar they earn.
The old rule was employees received super only when they earned more than $450 per month. Which was a poor piece of legislation because it created administrative overhead for payroll officers who had to be aware when employees crossed the threshold and then backwards calculate what was owed.
The new rule is clear. It's simple to administer (you don't need to tally up their earnings any more). And it's kinder to the lowest paid employees (and that's always a good thing).
To implement, just apply super in each pay run. As this is the removal of a rule, you can now treat low paid employees just like every other employee.
Let's look at some data and see how it applies. If an employee earned $500 in a month, they receive super. If they earned $400 per month, they receive super. If they earned $10 they receive super. If they earned $1 they receive super.
If you want to read the Australian Taxation Office's ruling, you can click here.
If you liked this article, can I ask you to please share on social media and subscribe to my mailing list below. Thank you, it means so much to me to have people read my articles. Have a great day, Rohini.
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about the author
Rohini works for one of the world's largest companies (you probably used their service during the pandemic) where she is the Head of Payroll for Australia, New Zealand, and several countries in Asia. Rohini is a member of the Australian Payroll Association.
Please remember that Rohini is sharing her personal thoughts and opinions, not those of her employer. Articles may contain errors and omissions. The reader is advised to seek independent advice.
Rohini moonlights as a payroll blogger because she understands small business owners don't have the qualifications, skills, training, experience, and legal resources of corporations. To give back to the community, she has released this series of articles which hopefully make the complex and confusing world of payroll more accessible to Aussie business owners, so they can meet the primary goal of the payroll function which is to ensure each and every employee receives precisely the salary, wages, overtime, allowances, superannuation, and bonuses they are entitled to within the rules of their legal jurisdiction.
Please remember that Rohini is sharing her personal thoughts and opinions, not those of her employer. Articles may contain errors and omissions. The reader is advised to seek independent advice.
Rohini moonlights as a payroll blogger because she understands small business owners don't have the qualifications, skills, training, experience, and legal resources of corporations. To give back to the community, she has released this series of articles which hopefully make the complex and confusing world of payroll more accessible to Aussie business owners, so they can meet the primary goal of the payroll function which is to ensure each and every employee receives precisely the salary, wages, overtime, allowances, superannuation, and bonuses they are entitled to within the rules of their legal jurisdiction.
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