Super guarantee $450 threshold scrapped
Scrapping the $450 per month super guarantee threshold was a parting gift of the Liberal Party.
From July 1, employers must make super guarantee payments for all employees regardless of an employee’s total monthly earnings.
As announced in the 2021–22 federal Budget, the Australian Government the $450 per month threshold will be scrapped from July 1 to expand coverage of super guarantee to eligible employees regardless of their monthly pay.
The new system aims to ensure all eligible employees earning less than $450 a month, do not slip through the system, missing out of valuable superannuation payments
Employers must update payroll and accounting systems to meet the super payment expectations starting 1 July 2022 and ensure each employee’s super guarantee entitlement is calculated correctly.
This will mean payroll budgets may increase as a result. Please consider these changes and factor this into your budget and cashflow forecast.
Employees must still satisfy other super guarantee eligibility requirements. It is likely your accounting/ payroll software will be updated to account for the new super requirements however we suggest you check.
The ATO website will update advice and guidance, including online tools and calculators on 1 July 2022 to account for this change.
If you need additional support, please contact us.