There has been an increase in the superannuation SGC rate from 10% to 10.5% effective from 1 July 2022. This is the next step change in the government’s proposed future SGC increases of half a percentage point each year, up to 12% on 1 July 2025.
As part of the Federal Budget 2021/22, the Australian Government announced the removal of the $450 per month threshold to expand the coverage of the SGC to eligible employees regardless of their monthly pay. From 1 July 2022, employers will be required to make SGC to their eligible employee’s super funds, regardless of how much the employee is paid, providing the employee satisfies other SGC eligibility.
Whilst the new federal government has in principle supported the rise of 5.1% for those on minimum wage, we are yet to see how this translates to the Fair Work annual wage review, with submissions open until 7 June on the subject. The FWC will then make an independent decision as to the increase and announce it in due course. It is also still unknown whether the FWC will increase the modern awards in a staggered manner, as in the past 2 years, or return to the more traditional annual review, with all awards increasing in the first full pay period in July.
On 16 May 2022, the FWC handed down a decision giving its provisional view that ‘paid’ family and domestic violence (FDV) leave entitlements should be included in 123 Modern Awards, which would replace the 5 days of unpaid FDV leave under NES with 10 days of paid FDV leave in the Modern Awards for all full-time and part-time (on a pro-rata basis) employees. They have determined that FDV leave should accrue progressively during a year of service (similar to personal leave) and accumulate from year to year, however, be subject to a ‘cap’ of 10 days at any given time.
This will be the first EOFY impacted by the STP Phase 2 reporting requirements, which should have been in place and being reported since 1 January 2022, unless a deferral is applied. The expansion of STP reduces the reporting requirements for employers across multiple government agencies and removes the requirement to lodge TFN declarations with the ATO.
Read More: The Promise Of An EOFY Party
As always at EOFY, care should be taken to determine if your employee pay year will be either a 53-week year or a 27-fortnight year. This is determined by working out how many payment days fall into the financial year based on your pay calendar.
(SGC = superannuation guarantee charge; FWC = Fair Work Commission; NES = National Employment Standards)
At Lucent Advisory, we offer an outsourced payroll service. Get in touch today if you would like us to take payroll off your hands.