With the beginning of a new financial year, it is important all employers are abreast of the numerous changes effective from 1 July 2021, including the increase in super guarantee rate, award wage increases and updated STP reporting obligations.
Further detail on the changes is outlined below. Most payroll software systems will update automatically, however, some systems will require manual adjustment. Before you process payroll from 1 July 2021 onwards, please check with your software provider to ensure you have the updated rates.
Superannuation Guarantee Rate Increase
The Super Guarantee rate increases to 10% from 1 July 2021. This rate applies to any payroll with a pay date on or after 1 July 2021 (regardless of the period the employee has worked).
Removal Of The $450 Per Month Threshold For Super Guarantee Eligibility (1 July 2022)
As part of the recently announced Federal Budget, the Australian Government announced the removal of the $450 per month threshold to expand coverage of super guarantee to eligible employees, regardless of their monthly pay. This means employers will need to make superannuation payments for all eligible employees, regardless of their monthly earnings.
STP – All Employers Must Now Report
Small employers are exempt from reporting amounts paid to closely held payees through Single Touch Payroll (STP) until 30 June 2021. From 1 July 2021, amounts paid to closely held payees will need to be reported through STP. If you are a small employer, you can report these amounts on or before each payday, or you can choose to report this information quarterly. If you have any other payees (also known as arm’s length employees) they must be reported on or before each payday. Find out more about employer STP reporting guidelines, at the ATO website.
2.5 % Increase in Minimum Wage
The Fair Work Commission has announced an increase to the national minimum wage for the 2021 Financial Year. This increase applies to anyone who is paid minimum award wages.
The award increase will occur in 3 different stages:
- 1 July 2021 – Most modern awards (eg. Fast Food and Clerks Private Sector Awards)
- 1 September 2021 – General Retail Industry Award 2020
- 1 November 2021 – Aviation, Tourism and Fitness Industry Awards
To find out more, go to Fair Work.
If you have further questions around the above information, please don’t hesitate to contact us.