Employers must increase employee super payments: ATO

Employers must increase employee super payments: ATO

Government fails in bid to freeze in bid to freeze super guarantee

Employers will now have to increase super payments to workers after the Federal Government failed to pass legislation to freeze the rate at 9.25 per cent.

Employers must now increase the compulsory super contributions they make on behalf of their employees from 9.25 per cent to 9.5 per cent.

This came into effect on July 1.

The Federal Government has announced the rate will remain at 9.5 per cent until June 30, 2018, and then increase by 0.5 percentage points each year until it reaches 12 per cent.

The government had made a pre-election promise to freeze the Super Guarantee at 9.25, but could not pass the legislation through the senate in time.

This resulted in the previous government's legislation becoming legally binding.

Australian tax office assistant commissioner, Emma Haines, said super contributions were calculated on the date employers pay your employees.

"If this date was on 1 July or after, then you will need to use the new super guarantee rate,” she said.

“Employers can use the ATO’s online superannuation guarantee contributions calculator to work out how much super they must contribute for eligible workers.”

Read more: Oakton reports profit fall amidst 'challenging conditions'

Small businesses are encouraged to use the ATO’s free Small Business Superannuation Clearing House service to help meet their super guarantee obligations.

The Small Business Superannuation Clearing House lets you pay your superannuation contributions in one transaction, to a single location; helping to make the process easier.

If you have 19 employees or fewer, you can use this free service to pay your super contributions in one transaction.

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Tags Australian Taxation Office (ATO)the federal governmentsuper guaranteeEmma HainesSmall Business Superannuation Clearing HouseAustralian tax office assistant commissioner

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