The SG rate for 2022/23 is 10.5% of an individual’s ordinary times earnings and is set to increase to 11% on 1 July 2023.
For small business owners, it is important to reconcile SG contributions made for employees for 2022/23, including casual or part time employees that earn less than $450 per calendar month. That is, since 1 July 2022, the $450 minimum income threshold no longer applies.
Employers need to ensure they make SG contributions for their employees before 30 June 2023 if they want to claim a deduction for them in the current financial year. Otherwise, they will need to ensure the June 2023 quarter contributions are paid by 28 July 2023 so as not to attract the SG charge, which is not tax-deductible.
Also, with the increase in SG from 1 July 2023, individuals with effective salary sacrifice arrangements will need to ensure that they do not breach their CC cap due to the additional SG contributions their employer is set to make. Noting that an effective salary sacrifice arrangement can only relate to income (including bonus payments) that an individual will earn in the future, now is a good time to start looking to review any salary sacrifice arrangements and get in place a new arrangement for 2023/24.
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Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.