No 15: Superannuation planning for businesses

The ATO has advised medium and large businesses to start preparing for changes to their super
obligations now to ensure they are ready for the changes on time.

The following reforms will impact businesses from 1 July 2013 onwards:

  • Employers must increase the compulsory super payments they make on behalf of their
    eligible employees from 9% to 9.25% (this rate will be gradually increased to 12% by July 2019),
    as shown in the table below.

    Year Rate
    Current rate 9.00%
    1 July 2013 9.25%
    1 July 2014 9.50%
    1 July 2015 10.00%
    1 July 2016 10.50%
    1 July 2017 11.00%
    1 July 2018 11.50%
    1 July 2019 and onwards 12.00%
  • The existing age limit for employee super guarantee eligibility will be removed. This means
    employers must start making super guarantee (SG) payments for eligible employees aged 70
    years and over.
  • Employers must make super guarantee payments for employees who have not selected a
    preferred fund, to a fund that offers a MySuper product, by 1 January 2014. Funds are allowed to
    start offering MySuper products from 1 July 2013.

In addition to the above, employers with 20 or more employees must use the data and e-commerce
standard (the Standard) by 1 July, 2014 as part of the Government’s SuperStream measures to
ensure all data and money are transferred electronically. Once implemented, the Standard will
provide a consistent and reliable method for processing superannuation payments electronically. The
ATO is encouraging employers and funds to work together to become data standard ready.

In relation to the first point, employers will need to check employment contracts and/or Awards to
see if the additional 0.25% superannuation can be deducted from the employee’s salary component
of their remuneration or whether the employer will need to fund this – effectively as a remuneration
increase. Therefore this should be considered when planning any remuneration adjustments from 1
July 2013.