The Senate has passed legislation freezing the minimum superannuation contribution necessary for employer’s to avoid a superannuation guarantee charge at 9.5% for the next seven years. The legislation has now commenced.
Previously, the current superannuation guarantee charge rate of 9.5% had been scheduled to increase to 12% by 1 July 2019, at the rate of 0.5% per financial year. However, the Federal Government indicated in its May Budget that it would seek to freeze the superannuation guarantee charge rate at 9.5% until 1 July 2018, thereby delaying the full increase until 1 July 2022. The new legislation further delays the superannuation increase. It freezes the superannuation guarantee charge rate at 9.5% until 30 June 2021, after which it will increase by 0.5 points on 1 July every financial year thereafter until it reaches 12% in 2025. See Schedule 6 of the Minerals Resource Rent Tax Repeal and Other Measures Bill 2014 (Cth).