In his weekly business banking post Greater Building Society CFO Greg Taylor looks at what the new changes to Super mean for your business.
There are important changes to superannuation that businesses need to know about that came into effect this week (July 1).
The most immediate changes are an increase to the super guarantee rate (SGR) of 0.25 per cent to 9.25 per cent. The other is the removal of the upper age limit for super guarantee payments.
The SGR is the minimum amount of super payment you must make on behalf of your employees. It is progressively rising to 12 per cent by July 1 2019. This means that you need to adjust your payroll and accounting systems to factor in the new rate.
The removal of the age limit means that you need to start paying super for eligible employees who are aged 70 and above.
Another change is that super funds have started offering Mysuper products from July 1. This is a new, simple and cost effective super product that will replace existing default products. (A default super fund is the one you nominate for employees who do not select a preferred fund.) From January 1, 2014 if your employee does not choose a fund, you have to make super contributions to a fund that offers a MySuper product.
You should also start investigating your options to meet a new data and e-commerce standard. The new standard will allow you to send super contributions and data on behalf of your employees to all funds in one standard electronic format, instead of sending information to separate funds in multiple formats. The plan is to reduce processing times and costs. You may need to update software or systems. The new standard will be compulsory for employers with more than 20 employees from January 1, 2014 and for employers with less than 19 employees from July 1, 2015.
If you have 19 or fewer employees, the Australian Tax Office suggests you use the Small Business Superannuation Clearing House to help you meet your super guarantee obligations.
This column is based on Greg’s weekly post in the Newcastle and Lake Macquarie Post.