Summary

From 1 July, the $450 super threshold will be removed – make sure your accounting systems are to ensure all employee’s super is calculated correctly.

In addition to changing the threshold, the super guarantee rate is also increasing from 10% to 10.5%. 

In Detail

Historically employers haven’t been required to pay superannuation to employees where their monthly gross earnings were below $450. Recently, new legislation was passed to remove the $450 per month threshold for superannuation contributions. As of 1st July 2022, employers will be required to make super guarantee contributions to their eligible employee’s super fund regardless of how much the employee is paid per month.

You will need to check your payroll and accounting systems have been updated prior to July 1, to ensure they correctly calculate your employee’s super guarantee entitlement.

We are yet to see if Xero and QuickBooks will remove this threshold automatically, but if not, you will need to check and manually update them.

For Xero users:

In the payroll menu, select Employees > click the employee’s name > select the Pay Template tab, then click the superannuation line > if using the Statutory Rate method, change the Minimum Monthly Earnings to zero.

For QuickBooks users:

Selecting Employees from your main menu > click the employee’s name > select Payroll Defaults > Super Threshold, tick to override the threshold and change the threshold to zero.