REMINDER: Occupational Superannuation increasing to 10% from 1 July 2021

1 July 2021 heralds a long-planned increase to occupational superannuation contributions which has been in the works since 2014. Despite last year’s retirement income review conducted by the Morrison Government warning an increase to super contributions was not needed and would curb wage growth, compulsory super contributions will increase from 9.5% to 10% from 1 July.

The 0.5% increase is scheduled to be the first of five over the coming years, designed to achieve the ultimate 12% from 1 July 2025. Whilst the increase to 10% will occur on 1 July, the Morrison Government is yet to guarantee that further planned increases will occur as scheduled.

As it currently stands, compulsory super contributions are scheduled to increase as follows:

Operative dateScheduled super contribution %
1 July 202110
1 July 202210.5
1 July 202311
1 July 202411.5
1 July 2025 onwards12

As part of this year’s federal budget, the Government flagged an intent to remove the minimum $450 monthly threshold for super contributions, meaning employers will be obliged to make occupational super contributions for all employees, regardless of what they earn. This change is not expected to come into force before July 2022, with the legislation needing to pass Parliament first.

Although further changes to superannuation obligations may well be on the horizon, for now, the increase to 10% from 1 July 2021 remains locked in.