Super increase to 10% from 1 July 2021 – what it means for your payslip?

All – New 10% Superannuation Rate 1 July 2021

Increase from 9.5% to 10% Super applies to wages paid from 1 July 2021.

Scenario A: Your contract is Y including super – less pay, more super
Scenario B: Your contract is X plus super – same pay, more super

Scenario A: Contract is X plus super – same pay, more super! You will receive an extra 0.5% into super.
i.e. Full Time $100,000 plus super – June payslip approx $6,249 net cash ($791.67 into super), July payslip same $6,249 cash ($829.55 into super).

Scenario B: Contract is Y including super – less pay, more super! Extra 0.5% into super BUT 0.5% less gross pay on your payslip (to which tax withheld would be applies).
I.e. Full Time $109,500 including super ($100k salary plus 9.5% super), June payslip approx $6,249 net cash per month (with $791.67 into super), July payslip would receive $6,224.12 net cash (with $829.55 into super)

Frequently Asked Questions:

Below are few FAQ –

1. Do I need to do anything with this information?

Ans – No. Your payroll specialist or employer update your payslips from July.

2. I want things how they were – can I ask my employer to leave it at 9.5%?

Ans – No. It is the law for employers to pay the legally required super which will increase to 10% for hours worked from 1 July 2021.

3. My mate doesn’t pay super – how come I do?

Ans – People who Contractor through a company can receive the full invoice amount without having super required to be paid on top.

Where the contractor is an individual/sole trader it depends whether super is required to be paid on top of the invoiced amount.

Basically – if there is an employment relationship, super could be deemed to be required to be paid on top of the individual invoiced amount.

For Example –

1. You get a tradie to fix something in  your house – no need to add super on top.

2. You pay $5k for your website – no need to add super on top.

3. You pay $500 a month to someone to assist you with marketing – it can depend based on the relationship whether there could be deemed to be an employment relationship.

4. You pay $30 per hour for someone to do tasks you assign them in your office – may be required to pay superannuation on top of the contracted amount as this sounds more like an employment arrangement.

Get in Touch, to know more about it. Visit us at – www.ipaccounting.com.au

About Scott Kay

Integrity Plus Accounting

Scott Kay is currently a husband and father of one young daughter. He founded Integrity Plus Accounting over 4 years ago and has had his own clients for over 10 years. He has worked for 3 other accounting businesses and loves to help clients grow – in their business, their wealth, their mindset and their lives.