On 1 July 2023, the Australian government increased the Superannuation Guarantee (SG) contribution rate by 0.5% to 11% of employees’ earnings. The SG rate is scheduled to increase by 0.5% each year until it reaches 12% of employees’ earnings on 1 July 2025.
Key details
Effective 1 July 2023, employers’ contributions to the SG increased from 10.5% to 11% of employees’ wages, up to a quarterly limit of AUD 62,270 for 2023-2024. Employers are not mandated to contribute to the SG for the portion of the employee’s earnings above the quarterly limit (known as the maximum superannuation contribution base) – unless applicable industrial awards or collective bargaining agreements provide otherwise.
Therefore, the maximum mandatory SG contribution per quarter increased from AUD 6,323 to AUD 6,849.70 based on the new SG contribution rate and maximum super contribution base.
Next steps
Employers should review their payroll and accounting systems to ensure compliance with the increased contribution rate. Employers may use the Australian government’s SG contribution calculator (opens a new window) to determine their new contribution rate for eligible employees. Employers who have traditionally contributed above the mandatory rate should consider their continued contribution strategy in light of increasing mandated contributions.