Selection of 9.5% or 10.0% SG rate for wage payments around 30 June 2021

As we flagged in last blog , from 1 July 2021, the SG rate will increase from 9.5% to 10%. For the many bookkeepers who handle payroll, it’s important to note that the new rate of 10% is only applicable to any salary and wage payments made to workers on or after 1 July 2021 – this is regardless of the period in which the services were performed by the employee. Following the release of that publication, we had some members query that advice (we welcome your feedback). We went back to the ATO for confirmation, and the acting Commissioner of Taxation for Super and Employer Obligations has now confirmed our suggested treatment.

This means if the pay period ends before 30 June, but the pay date falls on or after 1 July, the 10% rate applies on those salary and wages. The date of salary and wage payment determines the rate of super guarantee payable, regardless of when the work was performed.

For example, if the work was done:

• in June (or partly in June and partly in July) but employees were paid in July, the rate is 10% and contributions totalling 10% of the employee’s ordinary time earnings for the September 2021 quarter must be made to the employee’s super fund by 28 October

in July but employees were paid in advance (before 1July), the rate is 9.5% and contributions totalling 9.5% of the employee’s ordinary time earnings for the June 2021 quarter must be made to the employee’s super fund by 28 July.