Is Your Business Ready for the Changes to Superannuation Coming in July 2022?
There are several recent and upcoming changes to superannuation obligations that employers need to be aware of. While some of the changes may impact your payroll costs, GovReports will automatically take care of the changes in the background so you can carry on processing payroll.
Statutory Rate Rises to 10.5%
The super rate continues its planned increase to 12% in 2025, this year increasing to 10.5% from 1 July.
GovReports Single Touch Payroll (STP) products will automatically update the statutory rate to 10.5% for any pay runs dated and paid after 1 July, so you don’t have to worry about changing the software.
STP Phase 2 and Super
Single Touch Payroll Phase 2 includes more reporting categories and payroll information. In addition, STP V2 data can be transmitted to government agencies, making it faster and easier for employees to interact with the government.
- GovReports IAM STP Reporting Module has been automatically upgraded to STP V2 reporting in line with the ATO deadline of 1 March 2022.
- GovReports STP platform still has the option to use Phase 1 reporting for those employers who have been granted a deferral by the ATO. However, all other employers will need to upgrade to Phase 2 reporting if you haven’t already done so. The ATO is starting to contact employers who should be reporting STP V2 but haven’t yet.
STP reporting includes more detailed superannuation data, so the ATO can see what employees are entitled to. Late lodgment and payment of super incur hefty penalties, so this is one obligation you want to stay on top of!
If you miss payments, you have to submit a superannuation guarantee charge statement, which calculates the admin fees and interest owing on all earnings.
Learn more about the details at Single Touch Payroll Phase 2 and check the STP V2 User Guide for help with setting it up. Our support team is always available to help with any curly questions you might have.
Super-free $450 Monthly Threshold Removed
From 1 July 2022, the ATO will remove the monthly threshold of $450 for superannuation eligibility for most workers. This means employers have to pay the superannuation guarantee contribution on all ordinary earnings.
For some employers who rely on a team of casual workers who earn less than $450 per month, this could significantly impact payroll costs.
- Have you calculated the extra costs to your business? With the rate rising to 10.5% and super applying to all earnings, your business could notice the extra payroll costs.
There are some exceptions to the new rule: contractors who are paid super must still earn $450 per month; employees under 18 and domestic workers must work more than 30 hours and earn more than $450 per month; there are special rules for some international and temporary workers, so check the ATO super eligibility information for more details.
GovReports will automatically remove the monthly threshold to update the super calculation on ordinary earnings for relevant employees. In addition, we’ll automatically apply the criteria for workers who still have to earn $450 per month to be eligible for super so that the software will calculate it correctly.
Stapled Super Funds for Employees and Contractors
In November 2021, stapled super funds became available, making it easier for employers to choose an existing super fund for a new employee. This measure aims to reduce the number of super fund accounts that employees end up with unintentionally.
When a new employee starts, you still need to act on the employee’s choice of fund if they provide you with the details. If they don’t give you a super choice form, you need to check if they have an existing super fund before paying into your employer default fund.
You can check for existing super funds using the ATO online services for businesses or registered agents.
If the employee does not make a choice and does not have an existing fund, then pay into the default super fund for your business, so you meet your employer obligations.
GovReports Payroll Solutions
GovReports offers three payroll solutions, all of them ready for STP Phase 2 reporting.
- GovReports lodgment platform for business owners and registered agents
- IAM STP Reporting Module
- IAM Business Ledger
Talk to us if you’d like to know more about getting set up for STP V2 or which payroll product is best for your business.