Let’s look at an example
|Sally earns $100,000 per year|
|Scenario A – Base Package||Scenario B – Base Pay Plus Super|
|If Sally is employed on a “base package” arrangement, the additional 0.5% ($500 / year) super contribution will be made from her existing salary package. Therefore, the payroll system will redirect $500 of her regular pay to her superannuation account.||If Sally is employed on a “base pay, plus super” arrangement, the additional 0.5% ($500 / year) super contribution will be made by her employer in addition to her existing salary package. Therefore, the payroll system will add $500 / year to her superannuation account without impacting her regular take-home pay.|
Review Employment Contracts and Update Payroll
It is critical for all employers to review current active employment contracts and ensure that the superannuation increase is correctly processed out of the business payroll system for the new financial year, in line with the terms of each employment contract.
Whilst most payroll systems should be able to automatically handle the increase in superannuation, this is dependent on whether all employers were properly setup in that payroll system.
If you need assistance with ensuring your business’s payroll system is geared correctly for the superannuation increase, CharterNet can help so feel free to contact us.