The Super Guarantee (SG) has been scheduled to increase to 10% (previously 9.5%) on 1 July 2021 however, Mr Frydenberg has stated that in recent months a decision will be made in the May 2021 Budget as the Federal Government is yet to commit to the increase.
An employer contribution or an SG for short is required by your employer to make into a nominated super fund on your behalf. The SG is part of the payment you obtain from your employer.
Currently, the rate for an SG payment by your employer is 9.5%, set to increase to 10% on 1 July 2021.
The SG rate to increase to 10%, was originally to increase years ago in 2015, but the government delayed in the increase to slow the gradual increases in the rate.
Your employer must pay the SG if you are the following:
- 18 years old or over, and
- receive $450 or more (before tax) in salary or wages in a calendar month.
If you are under the age of 18, you will also need to work more than 30 hours per week to qualify for the SG contribution.
There is no age limit for employees to be entitled to SG contributions.
Despite having been originally scheduled to increase the SG cap to the 12% mark by 1 July 2019, it has been frozen at 9.5% since 2014,
The SG rate is set to gradually increase to 12% by July 1, 2025.
If your employer is not paying the mandatory 9.5% or 10% (once increased) – Please report to the ATO.
There are a lot of benefits to increasing your SG for superannuation as essentially this is your nest egg that you will be living off come retirement.
If you require help with understanding what’s best for you, the team at Superannuation Advice Australia can help. Contact us today!