Superannuation is increasing to 11% from 1 July 2023. Here’s what you need to consider.

The Australian Government announced a significant change to superannuation.

From 1st July, 2023, superannuation will increase to 11%. It’s It’s legislated to rise incrementally each year until it reaches 12% in 2025.

What’s the point of the changes to Australian superannuation?

There are big changes on the superannuation front. We wrote about the shift to Pay Day super here. These superannuation changes are designed to boost the retirement funds of Australian workers and prevent unpaid super.

How will payday super affect employers?

We can understand what the changes to super mean for employees. E.g.

“A 25 year old median incomer earner currently receiving their super quarterly and wages fortnightly could be around $6000 of 1.5% better off at retirement.”

Source: The Hon Jim Chalmers MP Treasurer

For business owners, it’s important to consider the impact these changes will have on your business. 

Things to consider with the increase in superannuation payments

When super increased last year, we made sure our client’s software was set up in advance to make sure they were on time and accurate in line with these changes. 

You also need to think about:

  • The impact on your pricing and cashflow.

  • An increase in superannuation also increases workers compensation premium as super is included in the definition of wages. For those who are paying payroll tax or are near the threshold for paying payroll tax this could push you over the threshold to pay payroll tax.

  • If you don’t have a bookkeeper – who will be responsible for setting this up correctly at first, and for the ongoing increase to superannuation in coming years, and move to Pay Day super on the 1st July 2026? Define who is responsible, allocate the time to do this and someone to review. 
Superannuation increase tips for Sutherland Shire Tradies. Photo credit Ben Michaels.
Photo credit Ben Michaels.

In the news: AustralianSuper to repay customers $70 million after double-charging members

Recently in the news, we saw AustralianSuper accidentally double charged members and now needs to pay back that money. While they are on the other side of the coin, we can see how detrimental an error that isn’t picked up can be to cash flow and reputation.

Read more from the 7 News article here

We can see that the change to superannuation is more than just an increase of payroll payment. If you’d like to book a chat with us, we’d love to hear from you.

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Ready to take your books and business to smooth operator level? Smart choice!

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Ready to take your books and business to smooth operator level? Smart choice!