$450 per month threshold removal for SG now law
From 1 July 2022, employees who earn less than $450 per month will be paid super guarantee by their employer if they satisfy other eligibility requirements. A change advice to update payroll programs and systems is available in Online services for Digital Service Providers.
In the 21/22 Budget, it was announced that the Government will remove the minimum $450 monthly income threshold, so from next year employers will have to pay Superannuation Guarantee (SG) contributions to all eligible employees aged 18 years and older, regardless of what they earn.
At the moment, employees (aged 18+) that earn less than $450 (before tax) per month are not entitled to superannuation guarantee payments from their employers.
The legislation is now passed, from 1 July 2022, employees who earn less than $450 per month will be paid super guarantee by their employer if they satisfy other eligibility requirements.
In a media statement from the Association of Superannuation Funds of Australia research (ASFA), it estimates that around 220,000 women and 145,000 men are missing out on around $125 million of superannuation contributions each year due to the $450 wage threshold.
This will predominately affect women because they make up the majority of part-time and casual workers. The Workplace Gender Equality statistics 2021 show that women constitute 67.2% of all part-time employees in Australia.
Superannuation is paid when you are working, so if women have had time away from work due to childcare, or family responsibilities, generally their superannuation would have stopped. Then, when they return to work part-time or on a casual basis, they may not have reached the $450 monthly income threshold, even if they work multiple jobs, it is only paid if you reach the threshold with each employer.
The removal of this threshold will help to make the system fairer on women, younger workers, and those working low paid jobs to help boost their super for retirement.
How can Elite Accounting Solutions Help?
Now more than ever, the team at Elite Accounting Solutions are positioning ourselves to help all our clients preparing for what is ahead of them. If you have any concerns about the income and tax implications of any recent changes, please do not hesitate to contact our office and speak with one of our accountants.
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