By Sean Melbourne
Employers are currently required to contribute 9.5% of their employees’ ordinary time earnings into a superannuation fund. The compulsory contribution rate is set to increase to 10% on 1 July 2021 and then gradually increase to 12% by 1 July 2025.
Given these changes will impact businesses’ bottom line, now is a good time for SMEs to understand the two different ways you can remunerate your employees. Option 1: Contribute super on top of base salary. Option 2: Build in super to a total remuneration package. The approach you take will affect how your business is affected by the coming increases in the compulsory super rate.