Removal of $450 monthly income threshold

From 1 July 2022, employees can be eligible for super guarantee (SG), regardless of how much they earn. This is because the $450 per month eligibility threshold for when SG is paid is being removed. Up until 1 July 2022, if you pay an employee $450 or more (before tax) in salary or wages in a calendar month, you will generally also need to pay super guarantee for them. Salary or wages includes any overtime. After 1 July 2022, you will need to pay their super regardless of how much they have earned in month. 

An increase in the Super Guarantee rate

The super guarantee (SG) rate will also increase from 10% to 10.5% on 1 July 2022. You’ll need to use the new rate to calculate super on payments you make to employees on or after 1 July, even if some or all of the pay period is for work done before 1 July. The SG rate is legislated to increase to 12% by 2025.

Make sure you update your payroll and accounting systems so that you continue to pay the right amount of super for your employees.

New age threshold for downsizers

The eligibility for downsizer contributions will be lowered from age 65 to 60, allowing retirees to contribute up to $300,000 to their super following the sale of their home.  Couples will be eligible to contribute up to $300,000 each.

It’s important to note that proceeds from the home sale that are transferred to super accounts will be included in the asset test for the Age Pension.

The principal place of residence will remain exempt from the asset test.

Contact us for an obligation free consultation or visit ATO website for more information.

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