Superannuation Guarantee (SG) will increase from 9.50% to 10% effective from 1 July 2021.

SG is paid by an employer to their employee’s nominated superannuation fund and is calculated as a % of an employee’s ordinary time earnings.

Some contractors may also be eligible for SG.

The impact on employees’ pay depends on their individual employment terms/contract:

• Generally, for employees who are paid SG on top of their wages, the employer will bear the cost of the increase to the SG rate from 1 July 2021. Employees will not see any impact on their take-home pay.

• Generally, for employees who are on a salary package that is inclusive of superannuation, employees will see a decrease in their take-home pay. However, their employer will contribute extra to their superannuation fund.

• For employees on salary packages inclusive of superannuation, employers may choose to absorb the cost of the extra 0.5% superannuation guarantee to maintain their employees’ take-home pay levels.

Employers will need to:

• Calculate the change to their employees’ pay as a result of the increase in the SG rate;

• Communicate the change to their employees and the impact on their pays from 1 July 2021.

• Ensure payroll software is updated to calculate SG at the correct 10% and update employees’ pay information (so you are ready to go from 1 July 2021).

• The increase in SG will need to be factored into the business’s cash flow and budgets for the new financial year.

Employees should:

• Review salary sacrifice superannuation arrangements and ensure satisfy the super contribution limits.

• Understand the changes to their pay after 1 July 2021.

• If you have any questions, raise this with your employer/payroll administrator as soon as possible.

The SG will increase annually from 1 July 2021 to 1 July 2025 when it will be 12%. Employers will need to keep up to date with the changes as penalties may be imposed by the Australian Taxation Office (ATO) for not meeting your SG obligations.


Please contact us to find out how this will impact you and your business.

Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances. The team at EMspire Advisory are experienced Chartered Accountants, bookkeepers, and tax agents in Sydney and would like to help you create, grow and succeed in business.