Are You Ready for the Superannuation Increase from 1 July 2023?

If you’re an employer, now’s the time to prepare for the superannuation guarantee statutory rate increase. From 1 July 2023, the rate will be 11%.

Small business payroll can be demanding – but here at MORE Bookkeeping Melbourne, we can look after payroll and super and make your employer obligations easier.

Your payroll software should automatically apply the increase to any pay runs processed from this date, but it's best to check the settings to be sure. For example, if you have created custom payroll categories that attract super, check that you have the correct rate from 1 July.

Your first quarterly superannuation payment at the new rate will be due in October 2023.

Single Touch Payroll Super Reporting

Single Touch Payroll (STP) reporting to the ATO includes superannuation amounts owed to employees. Right now, STP reports the amounts owed but doesn't require you to show the actual payment. The ATO plans to bring in an obligation to pay superannuation at the time of each pay run – we'll write more on this topic in future when it becomes mandatory.

For now, make sure your super payments are up-to-date because late payments incur heavy penalties and interest. This is one employer obligation you want to be on top of!

Do You Need Help Staying Ahead of Payroll Costs?

If you’d like a review of your payroll systems and costs, talk to us today. We can help you plan for the impacts of the increased super expenses on your business and advise on payroll processing.

Before the end of the year is an excellent time to review your payroll software to ensure that you are processing payroll correctly – better yet, hand it over to our team of Xero payroll experts. We’ll also review the year’s payroll ahead of the STP finalisation process so you know your employees are getting correct income statements in their myGov accounts.

MORE Bookkeeping Melbourne Proactive Payroll Preparation

• Review your current superannuation costs for all employees, both hourly and salaried.
• Review all employment agreements or annualised salary arrangements that could be listed as inclusive of superannuation. If this is the case, you may need to update your agreement to show the correct base salary and superannuation percentage as an additional calculation.
• Check for any contractors that are eligible for super. You could calculate their average monthly cost to get an idea of the expected super cost from July.
• Calculate your revised payroll costs from July, showing the current total superannuation expense compared to the new rate from July 2023. Highlight the increased amount per month or quarter so you know the impact.
• Check your Single Touch Payroll settings so you know that super obligations are being reported correctly to the ATO.
• It's a good idea to inform your employees about the increased superannuation calculation and your obligations so they know their entitlements.

If you'd like help to review your small business payroll costs and employee agreements, talk to us now, and we'll help you stay on top of your super obligations. Or, if you're thinking of handing over payroll processing to Xero payroll experts, we'd love to hear from you! Planning now means you'll be well prepared for your business's increased costs when the first super payment is due later this year.