There are superannuation changes ahead that both employers and employees should be aware of. Catch the video below or read through for more information.
Increased Super Guarantee: By now employers should be aware that the compulsory employee superannuation guarantee is increasing from the current rate of 9% to 9.25% at the 1st of July, 2013. Even if you’re a sole director and employee of your own company, this is going to apply to you and the amount of super that you have to pay for yourself.
Removal of Age Limits: In addition, we’ll also see the removal of upper age limits for making Super Guarantee contributions. This means that you may need to make super payments for eligible employees over the age of 70 years.
Payslip Changes: Once again, there is talk of new payslip obligations. This time the expectation is you will provide details on employee payslips about the actual super contributions that have been paid into their account (not just the amount they are entitled to). The timing of this change is subject to legislation and so we’re still awaiting final details.
Employers, don’t wait around until the new financial year to start taking action. You need to ensure that your payroll and accounting systems are up-to-date and you’re ready to apply these changes on the 1st of July. If you have less than 19 employees, you might want to look at the small business superannuation clearing house to help manage multiple super payments if this is becoming an issue for you.
It’s not all about the employers, though; there are a few things for employees to consider, too.
Low Income Superannuation Contribution (LISC): This year has seen the introduction of the low income superannuation contribution (LISC). The LISC can provide a contribution of up to $500 each year for individuals on adjusted taxable incomes of up to $37,000. This works at a matching rate of 15% of contributions. So if you received $1,000 of concessional super contributions, you would actually have $150 reimbursed. This is the amount the fund has already paid on your behalf for contributions tax (again, this is a reimbursement, not a bonus). The government will refund that amount directly into the superannuation fund.
Super Co-Contribution: Remember also that the superannuation co-contribution is still available. If you earn less than $31,920, you can receive a government co-contribution of 50 cents for every dollar that you put into your fund, up to a maximum of $500.
If you’d like more information on either the low income super contribution or the government co-contribution, please let me know in the comments section. If people want to know more about this, then I’ll prepare a more detailed blog post or video.
SuperSeeker Improved: Keeping track of your super is even easier now with some recent positive changes to the online SuperSeeker tool. You can check your super accounts, find lost super and easily transfer between funds. Simply go to ato.gov.au/superseeker.
THINGS TO DO!
So what are some things that you could be doing?
The first thing you want to do is ensure that your fund has your tax file number. Without it, you could be paying more tax than necessary and your fund will be unable to accept certain types of contributions on your behalf; like the government co-contribution.
Also, with the superannuation guarantee increase, it’s a good idea to review and monitor your salary sacrifice arrangements to avoid accidentally exceeding contribution caps.