Preparing your business for upcoming changes to superannuation

There are some significant changes coming soon for superannuation that will affect employers. We can help you understand the impact they will have on how you manage your superannuation obligations and make sure you stay compliant.

Many of these changes are proposed to come into effect from 1 July 2021 (except for 'stapling'). To ensure you have time to prepare, we’ll keep you updated as they develop.

Here’s a snapshot of the proposed key changes. 

1. A single super account to follow people when they move from job to job (known as 'stapling')

'Stapling' will commence from 1 November 2021.

This is perhaps the biggest change for employers. ‘Stapling’ is where your new employees will automatically keep their existing super fund (if they have one) when they start their employment with you, unless they choose a fund themselves.

Draft regulations (released 28 April 2021) include the definition of a ‘stapled’ fund and tie-breaker rules to determine which fund will be ‘stapled’ to an employee where they have multiple funds. 

The Australian Taxation Office (ATO) is expected to publish more information about ‘stapling’ shortly, including how employers can determine an employee’s ‘stapled’ fund.

You can read more about ‘stapling’ at our ‘A focus on stapling’ page or by watching a recording of our ‘Super changes and what they mean for employers’ webinar.

2. The scheduled increase to Super Guarantee (SG) contributions from 9.5% to 10% 

Compulsory employer SG payments increased from 9.5% to 10% on 1 July 2021.

How this impacts your SG obligations

You’ll need to adjust your payroll systems to pay the increased amount to your eligible employees.

If you don’t pay the correct rate of SG into your employees’ super accounts by the quarterly due date, you may have to pay the Superannuation Guarantee Charge (SGC). This ATO penalty for late or inaccurate payment includes all the SG amounts owing to an employee, plus interest and an administration fee. You will also need to report and rectify any missed payments by lodging an SG Statement with the ATO. For more information about your SG obligations and quarterly due dates, visit the ATO website.

3. Contribution caps increasing

Contribution caps have increased for the first time since 2017. 

Contribution cap

Before 1 July 2021

Current

Concessional

$25,000

$27,500

Non-concessional (annual)

$100,000

$110,000

Maximium non-concessional
(bring-forward)

$300,000

$330,000*

* Assumes under age 67 at some time during year contribution made and that total superannuation balance was less than $1.48m at 30 June 2021.

It’s also worth noting that anyone who triggered their bring-forward period in either the 2019/20 financial year or the 2020/21 financial year can’t take advantage of the higher non-concessional cap until their current bring-forward period expires. 

The transfer balance cap is also increasing with indexation, taking it to $1.7 million. This means an individual can’t make any non-concessional contributions if their total superannuation balance is $1.7 million or more at 30 June 2021. 

How to remain within contribution caps 

Employees are responsible for ensuring they don’t breach their overall contribution caps each year.

However, as an employer, the Federal Government also sets a maximum limit on an employee’s income on which you need to pay SG contributions – the maximum superannuation contribution base. The limit is indexed to AWOTE and changes every financial year. For 2021/22, the limit is $58,920 per quarter, so you only need to pay SG contributions on any amount an employee earns up to $58,920 per quarter for the 2021/22 financial year.

4. New electronic reporting payroll obligations

The Government introduced Single Touch Payroll (STP) in 2018 to reduce employers' reporting burdens. Using STP-enabled accounting or payroll software, like Xero or MYOB, employers can report all employee payroll information (salaries, PAYG withholding tax and super) directly to the ATO each time they are paid. 

Employers with more than 20 employees have been using STP since 1 July 2018, but from 1 July 2021, all employers will have to report payroll obligations electronically (unless they have an exemption). 

In a broader enhancement to STP, Phase 2 is due to roll out on 1 January 2022. The ATO is working with software providers to update all existing STP-enabled software so employers benefit from further streamlined reporting. Rather than reporting information about employees to multiple government agencies, the software will enable consolidated reporting, easing the administration burden.

How this impacts your payroll software

We recommend you speak to your existing software provider and/or check the ATO website for more information about the changes closer to the implementation date. 

Keep informed

Stay up to date with the latest on ‘stapling’ at our ‘A focus on ‘stapling’ page’. 

If you missed our 'Super changes and what they mean for employers' webinar, you can watch a recording of it.

To stay up to date with the latest news on these changes follow BT on LinkedIn.

Whether you own a small business or run a big company, BT Super can help you manage your employer super with ease.

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This information is current as at 18 June 2021.

The information is prepared by BT Funds Management Limited ABN 63 002 916 458 (BTFM) the trustee of:

(a) BT Super for Life, BT Super for Life Westpac Group Plan and BT Super part of the superannuation fund Retirement Wrap ABN 39 827 542 991; and

(b) Asgard Employee Super Account part of the superannuation fund the Asgard Independence Plan Division Two ABN 90 194 410 365. 

This information has been prepared as general advice only and does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs before acting on it. Read the Product Disclosure Statement (PDS) to see if these products are right for you by visiting bt.com.au or asgard.com.au. 

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