29 July

Changes to Superannuation Rules, 1 July 2021

Super Guarantee Rate Rise 
The Super Guarantee rate rose from 9.5% to 10% on 1 July 2021. If you are an employer, from 1 July you need to pay your employees minimum superannuation (the Super Guarantee) calculated as 10% of their eligible earnings, to their nominated super account. 

Remember that if you pay contractors mainly for their labour, they are employees for Super Guarantee purposes and you may need to pay superannuation to a super account for them. 

If you are an employee, you should check that you are being paid the minimum amount superannuation, being 10% of your eligible earnings, to your super account starting 1 July. 

The Super Guarantee has been set at 9.5% since 2014 and under the current schedule of legislated increases, will rise again to 10.5% on 1 July 2022. 

Some other changes  

  • Increase in the concessional (before-tax) contributions cap – The maximum concessional (before-tax) contributions you can put into your super account each year will increase to $27,500 from the previous cap of  $25,000. 
  • Increase in non-concessional (after-tax) contributions cap – The most non-concessional (after-tax) contributions you can put into your super account each year will increase to $110,000. This annual cap was previously $100,000. 
  • Your Future, Your Super reforms – To make it easier to choose a new or better super fund, the Australian Taxation Office (ATO) has developed the new online YourSuper comparison tool. The tool ranks funds by fees and investment returns, and shows a member’s current super accounts. ‘Stapling’ new employees to their existing super fund – When new employees start a new job, if they don’t nominate a specific super fund, they will automatically keep their existing super fund (if they have one) ie super will be paid by their employer into their existing super fund. This change only comes into effect on 1 November 2021. 
  • Bring-forward rule extended to 65 and 66 year olds – Depending on your super balance (it must be under $1.48 million), if you are aged under 67, you may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year ie $330,000 in one payment for the next three years – ie $110,000 x 3 (bring-forward rule). This change was backdated to cover contributions made from 1 July 2020. 
  • No more Excess Concessional Contribution Charge – If you exceed the annual concessional contribution cap ($27,500 in 2021/22), you will no longer be liable to pay an Excess Concessional Contributions Charge to the ATO. You will however still be issued with a determination and be taxed at your marginal tax rate (less a 15% tax offset) on the excess amount. 
  • Recontribution of COVID-19 early release amounts – If you received a COVID-19 early release (of up to $20,000) from your super, you can re-contribute the amount without it counting towards your annual non-concessional contributions cap. The re-contributions cannot exceed the amount accessed early and cannot be claimed as a tax deduction for a voluntary personal super contribution. The re-contributions can be made any time before 30 June 2030. 

The ATO website has more information about super for employers here and information about super for individuals here.

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