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Superannuation Guarantee Levy changes from 1st July 2013

Currently, the superannuation guarantee levy (SGL) is calculated on your employee's ordinary earnings at 9% (when their ordinary earnings are more than $450 per month)

From 1st July 2013, this rate will increase to 9.25%.


On Monday 1st July 2013, any pays that you process will have the new SGL rate of 9.25% applied to them.  This is even if the pays relate to the week(s) prior to 30th June 2013.  The new rate applies to all pays that are processed and paid on or after 1st July 2013.

EG1  Phillip has a small business with 5 employees.  His pay fortnight finishes on the Saturday 29th June 2013 and the employees are paid on the Monday 1st July 2013.  Even though all the wages are in relation to the 2012-13 year, the superannuation needs to be calculated at 9.25% as the physical payment is made on 1st July 2013.

EG2  Helen has a small business with 4 employees.  Her pay week finishes on Tuesday 25th June 2013 and the employees are paid on Friday 28th June 2013.  The superannuation on these wages will be calculated at 9.00% as the physical payment is made before 1st July 2013.  The superannuation on the next pay week will need to be calculated at 9.25%

Therefore on Monday morning (1st July) the first thing you should do is update your payroll system to increase the SGL rate to 9.25%. 

At this stage, we don't believe that payroll software providers will be issuing an update that will amend the rate for you.  Therefore you will need to go into all your superannuation categories and update the rate manually.

Removal of Superannuation Guarantee Levy upper Age Limit

Also from 1st July 2013, there will be no upper age limit for making superannuation guarantee contributions for employees. 

If you have any employees that are over 70 years of age, they may have previously been excluded from your superannuation guarantee calculations.  Therefore you will need to review any employees that are over 70 and ensure that they are identified and update your system to recognise them for the calculation of superannuation.

Superannuation Contributions – Tax Deduction

As in previous years, the superannuation guarantee levy for employees and your own personal contributions will be deductible in the financial year that they are paid.  Therefore if you want a deduction for your contributions, the payment must be made before 30th June 2013.

The ATO have advised that simply making the payment before 30th June each year is not sufficient for you to be able to claim the deduction.  The contribution must actually have been received by the superannuation fund before the 30th June 2013.  As electronic payments can take several days to process through the banking system, and the 30th is a Sunday this year, please ensure that your contributions are made early enough to have been credited to the superannuation fund by Friday 28th June 2013.

Maximum Superannuation Contributions 2012-13 year

The maximum superannuation contribution available for the 2012-13 year is $25,000.  This is regardless of your age.  This is the maximum contribution allowable per person, not per superannuation fund.  This amount includes both the 9% SGL and any salary sacrifice amounts.

Please ensure that all contributions made for both yourselves and your employees are less than $25,000 for the year.

Maximum Superannuation Contributions 2013-14 year

It is proposed that , from 1st July 2013, the maximum superannuation contribution for taxpayers aged over 60, will increase to $35,000.  From 1st July 2014, this upper limit of $35,000 will apply to taxpayers aged over 50.  The Legislation for these changes has not yet been passed.

MYSuper products

Every employee has the right to request that their superannuation guarantee amounts are deposited with a superannuation fund of their choice.  If they do not make this choice, the employer will have a default fund where these employee contributions are paid.

From 1st January 2014, employers must make these contributions to a fund that offers a MySuper product. 

It is expected that most existing default funds will offer a MySuper product and that you won't have to make any changes to the payment of your SGL contributions.  Your fund should contact you in relation to these changes.  However if you have not heard from your fund you should contact them to ensure that they offer this product.  If they do not, you will need to find an alternative superannuation fund that does.

If you require assistance with any of the above matters, please do not hesitate to contact your PRT partner or any of our helpful staff.

Happy New Financial Year!!