The changes started on 1 July 2022. You need to pay super for employees at a rate of 10.5%, regardless of how much they earn, because the $450-per-month threshold for SG eligibility has been removed.
For example, Danny is a 26-year-old employee working at a short-term job at his local café over the holiday season. He works 20 hours in a month, earning $430 before tax.
Danny is eligible for super because:
- he is over 18 years old
- he has been paid an amount for his ordinary hours of work
- the $450 threshold no longer applies.
The Australian Taxation Office (ATO) recommend checking eligibility for employees such as Danny who may not previously have been eligible for SG.
You should also be mindful of other eligibility requirements for SG – particularly if you hire workers who are under 18 years old. These workers still need to work more than 30 hours in a week to be eligible for SG.
For example, Abby is a 16-year-old hired to work in a restaurant on a casual basis. She works 15 hours a month and earns $195 before tax.
She is not eligible for super because:
- she is under 18 years old
- she has not worked more than 30 hours in the week.
Remember, as an employer you need to:
- check your payroll and accounting systems have been updated so you are calculating your employees' SG payments correctly
- ensure you pay the right amount of SG to all eligible employees in full, on time and to the right fund by the due date.
TAX AND NEW EMPLOYEES
Have you taken on new employees? Did you know you can complete a TFN declaration through ATO online services?
This is an easy way for an employee to provide both you and the ATO with the information they need. If your new employee has a myGov account linked to the ATO, they can:
- access ATO online services
- go to the ‘Employment’ menu
- select ‘New employment’ and complete the form.
This sends the TFN declaration details straight to the ATO, so you do not have to. Your employee will need your ABN to complete the form. Once they have submitted the form, they need to print it and give you the summary of their tax details so you can input the data into your system.
You may be able to link your payroll software to the online commencement forms. But check first with your software provider if they offer this service.
You can also use the New employment form to collect a range of information. Despite its name, you can also use this form instead of the:
- Withholding declaration form
- Medicare levy variation declaration form
- Superannuation standard choice form.
Your employees can use the New employment form to update their tax circumstances with you, for example, if:
- their residency status has changed
- they no longer have a government study and training loan
- they are claiming the tax-free threshold from a different employer.
You can continue to use your current processes, including providing a paper TFN declaration where employees cannot create a myGov account or do not have access to the internet.