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Australian Retirement Trust (ART) has laid the gauntlet down towards employers, stating they need to take note of the new super changes or face the process of rectifying underpayment.
Taking note of the new 11.5 per cent super guarantee (SG) rate, which has been in place since 1 July, is crucial for employers going forward if they want to avoid a struggle at the Tax Office.
ART’s head of employer, platforms and partnerships, Mathew Gilroy, shared some insight on the potential ramifications for employers who don’t pay the required rate of SG into their employees’ super accounts by the quarterly due date.
“The next super guarantee rate increases of 0.5 per cent from 1 July 2024 will help more working Australians retire with confidence, but employers who aren’t keeping pace with the changes will have to report and rectify any missed or underpayments by lodging an SG statement and paying the SGC,” Gilroy said.
“The SGC includes all the SG amounts owing to employees, plus interest and an administration fee. It’s a headache and a hit to the employer’s back pocket you want to avoid.”
Massive payroll errors from big-time corporations have swept through the media headlines over the past couple of months, with Woolworths, Vision Australia, and CommBank all committing various underpayments.
According to the Fair Work Ombudsman (FWO), they recovered $532 million in unpaid wages and entitlements in the 2021–22 financial year. Approximately $279 million of these total underpayments were recovered solely from large corporate employers.
Gilroy said the super payments landscape is constantly evolving, and employers who may still rely on manual processes for their payroll should consider upgrading to avoid making egregious errors and, therefore, catching the wrath of the Tax Office.
“It’s not just the super guarantee rate employers need to consider – from 1 July 2026, the government’s payday super mandate means employers who pay wages fortnightly or weekly may need to level up and pay super 26 or 52 times, respectively, each year, instead of at least four times per year as is currently required,” Gilroy said.
Having updated payroll systems can create smooth sailing for organisations even when legislative changes come about. Relying on traditional, manual systems opens businesses up to the imminent threat of making errors, which not only has disastrous financial implications for the business itself but can also dissuade trust between employees and their employers if they are not paid correctly.
“With necessary inputs, legislative changes like these that affect super payment amounts and timings can be automated for employers, so the right amount of super is paid on time, every time,” said Gilroy.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
