Superannuation guarantee contribution rate

The superannuation guarantee contribution rate increases from 9.25% to 9.5% from 1 July 2014.  Whilst the Budget included a proposal to defer any future increases for four years, that proposal will not affect the 9.5% rate which is currently legislated.

Superannuation examples

We had a number of queries about how the change in the superannuation rate will apply to employee pay occurring around the year-end period.  The following summarises the various situations that may be encountered:

Pay period for the fortnight ended: Paid: Super paid: Rate applying:
28 June 30 June 30 June 9.25% on all
28 June 30 June 6 July 9.25% on all
28 June 1 July 6 July 9.5% on all
3 July 4 July 30 June 9.5% on all
6 July 29 June but pay is one week in arrears and one week in advance 4 July 9.25% on all

The critical point to note is when the wages were paid and not when the superannuation was paid.  Thus any wages paid by 30 June will be subject to superannuation at 9.25% and any wages paid on or after 1 July, even if all or part of it is related to the 2013-2014 income year, are subject to superannuation at 9.5%.

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