Employer contribution deadlines to ensure a tax deduction for 2021/22

We remind employers that superannuation contributions are only considered to have been paid for the purpose of claiming a tax deduction once they have been received by the super fund.

If you wish to claim a tax deduction for your contributions in the 2021/22 financial year, payments must be received by your employees’ super funds by 30 June.

Please allow sufficient time for the payment to reach the employees’ super fund account.

To meet this deadline, payments will need to be made well in advance to allow for processing time, particularly if there is a clearing house involved. The ATO Small Business Superannuation Clearing House has stipulated that they must accept payments on or before 25 June 2022 to ensure payments reach employees’ super funds on time.

Please note, our QBO clients using Beam must have their super payment successfully uploaded by 3.30pm on 23 June.

Removal of the $450 per month threshold for superannuation guarantee eligibility

The Government recently removed the $450 per month threshold on the superannuation guarantee eligibility.  From 1 July 2022, employers will be required to make super guarantee contributions to their eligible employee’s super fund regardless of how much they earn.

Employers only need to pay super for workers under 18 when they work more than 30 hours in a week.

Employers should check their payroll and accounting systems to ensure they have been updated for super payments made after 1 July 2022 to ensure they correctly calculate their employee’s super guarantee entitlement.

Super guarantee rate rising from 1 July 2022

The super guarantee rate will increase to 10.5% on 1 July 2022, so businesses with employees will need to ensure their payroll and accounting systems are updated to incorporate the increase to the super rate.

It is important for employers to note that the new 10.5% rate will apply to ordinary times earnings paid after 30 June, irrespective of when those amounts accrued. Accordingly, payroll paid on or after 1st July will incur the 10.5% rate, even if some of the payroll period relates to the month of June.

Employers should also be aware that the increasing super guarantee rate has implications for employees remunerated through a superannuation inclusive package. In the absence of a remuneration review, an employee’s take home payments will likely reduce from 1 July.  To remedy this situation a pay increase may need to be considered to ensure the consistency of employee take-home payments.

No change to super contribution caps for 2022/23

The ATO has confirmed that the superannuation concessional and non-concessional contribution caps will remain unchanged for the 2022/23 financial year.  The caps for the 2022/23 year will be:

  • Concessional Cap:  $27,500
  • Non-Concessional cap:  $110,000 (or $330,000 over 3 years)

The total superannuation balance limit that determines if an individual has a non-concessional contributions cap of nil will be $1.7 million, effective from 1 July 2022.

However, as we approach a new financial year it will be important, particularly given the increasing super guarantee rate, for clients to review their arrangements to ensure contribution caps are not exceeded.

Re-contribution of COVID-19 early release super amounts

Individuals can now re-contribute amounts they withdrew under the COVID-19 early release of super program without the re-contribution counting towards their non-concessional contributions cap.

These contributions can be made between 1 July 2021 and 30 June 2030.

Individuals can make COVID-19 re-contribution amounts to any fund of their choice where the funds’ rules allow.

COVID-19 re-contribution amounts are reported as personal contributions. If the fund member is found to be ineligible to make the re-contribution (for example, the fund member may be required to satisfy the work test and does not do so at the time of a re-contribution) it may result in that member exceeding their non-concessional contributions cap.

It should be noted that once an amount originally withdrawn under the

COVID-19 early release of super program has been re-contributed into a superannuation fund, it will not be able to be released from that fund until the fund member satisfies a condition of release – such as obtaining the age of 65 or having met their preservation age and they have ‘retired’.