The Australian Federal Government recently announced in its May 2021 budget an increase to the superannuation guarantee (SG) rate to 10%. Effective from 1 July this year, Ventia will increase the SG rate from 9.5% to 10% for all salaried employees to ensure our business is compliant with the Superannuation Guarantee legislation.
The good news is that your SG payment will increase
The SG is the amount of superannuation an employer must contribute on behalf of their eligible employees. The rate of SG has been 9.5% per annum since 1 July 2014. From 1 July 2021, the contribution made to your super on by Ventia will increase to 10%. This mean that every time you get paid your salary or wages, we will making a 10% contribution (instead of 9.5%) towards your superannuation.
After that date, you will be able to see your new SG contribution from Ventia on your payslip, year-to-date income, tax and super on the myGov website.
And it gets even better
Starting July 2021, the SG legislation states that superannuation payments will increase incrementally each year until they reach 12% in 2025.
Your long term financial wellbeing is a priority for Ventia.
Compliance with the Superannuation Guarantee legislation reinforces Ventia’s commitment to the financial wellbeing of Ventia employees by positively impacting retirement income potential.
A rise to 10% SG and the subsequent rate changes up to 12% in 2025 means you will be paid more super.
This will contribute to a higher balance (subject to superannuation fund investment performance) during your working life.
This important change will benefit all Ventia salaried and wages employees because it ensures that a higher minimum percentage of your earnings is paid into your super.
This money will help the likelihood of a more comfortable retirement
The legislated rate change of 10% effective 1 July this year will be non -discriminatorily applied to all current and prospective employees.
From 1 July this year, regardless of role or tenure, all salaried and wages employees at Ventia will receive the increased rate 10% towards their superannuation.
Information & resources
It is important that you fully understand these changes to your superannuation. Explore further information on the legislated changes and rates on the Australian Taxation Office (ATO) guide to SG.
To better understand your Total Fixed Remuneration (TFR), and access pay and superannuation-related information, tools and resources, visit the pay and conditions page on InVent.
A set of answers to frequently asked questions
On 1 July 2021, the Australian superannuation guarantee (SG) rate must increase to 10%. This is a 0.5% increase from the current 9.5%. The Australian Federal Government confirmed in the recent budget announcement that the change will be implemented. The SG is part of the remuneration you receive and is a set percentage of your ordinary time earnings.
Australian salaried employees
All salaried employees are remunerated under a Total Fixed Remuneration (TFR) arrangement which is inclusive of SG payments. With the change to the SG rate, the TFR will remain unchanged with the base pay and SG values changing. This is illustrated in the example below.
| TFR Element | Current (p/a) (Full Time Equivalent) |
As at 1 July 2021 (p/a) (Full Time Equivalent) |
| Base Pay | $136,986 | $136,364 |
| Superannuation Guarantee | $13,014 | $13,636 |
| Total Fixed Remuneration (TFR) | $150,000 | $150,000 |
*To calculate the base pay, divide the TFR by 1.095 (Current) or 1.10 (as at 1 July). Difference between TFR and base pay is the SG value.
In the above example, the superannuation contribution increases by $622 per annum whilst the gross base pay decreases by the same amount. PAYG tax will be applied to the amended gross base pay. It is important to note that SG contributions for those with total income including pre-tax and SG superannuation contributions below $250,000 per financial year is taxed at the concessional contribution rate of 15% when it is received by your superannuation fund.
Australian wages employees
Wages employees are generally employed under the terms and conditions set out in their relevant industrial agreements. Under these agreements, remuneration is calculated as base rate plus allowances and benefits.
The change in the superannuation guarantee rate will mean an increase in the superannuation contribution by Ventia for each wages employee. This is illustrated in the example below. Note that SG is calculated on ordinary time earnings (OTE) which excludes overtime payments.
| Remuneration Elements | Current (p/a) (Full Time Equivalent) |
As at 1 July 2021 (p/a) (Full Time Equivalent) |
| Base Rate | $80,000 | $80,000 |
| Allowance 1 | $15,000 | $15,000 |
| Allowance 2 | $6,000 | $6,000 |
| Superannuation Guarantee | $9,595 | $10,100 |
| Total | $110,595 | $111,100 |
No. SG is legislated by the Australian Federal Government and all employers must comply with the legislated requirements.
Employers are required to pay SG contributions where an employee, aged 18 or over is earning $450 or more (before tax) in a calendar month. These obligations apply to Ventia Group employees. Ventia Group includes all entities of Ventia. The rules do not reduce or limit entitlements properly payable under an Enterprise Agreement or any other binding commitment of Ventia. Note that the Government announced in the budget a proposal to remove the $450 a month threshold. This will require it to be legislated on before being implemented.
The SG rate change to 10% will come into effect from 1 July 2021.
Salaried employees will see a change to the gross amounts applied to base pay and SG contributions. Total Fixed Remuneration (TFR) will remain unchanged.
This is illustrated in the below example.
| TFR Element | Current (p/a)
(Full Time Equivalent) |
As at 1 July 2021 (p/a)
(Full Time Equivalent) |
| Base Pay | $136,986 | $136,364 |
| Superannuation Guarantee | $13,014 | $13,636 |
| Total Fixed Remuneration (TFR) | $150,000 | $150,000 |
In the above example, the superannuation contribution increases by $622 per annum whilst the gross base pay decreases by the same amount. PAYG tax will be applied to the amended gross base pay. It is important to note that SG contributions for those with total income including pre-tax and SG superannuation contributions below $250,000 per financial year is taxed at the concessional contribution rate of 15% when it is received by your superannuation fund.
For salaried employees, Ventia provides you with a Total Fixed Remuneration (TFR) inclusive of base pay and superannuation guarantee. The TFR is funded by Ventia. The adjustment to the SG rate means that a change must occur for the elements that make up TFR.
The overall TFR will not change, but the increase to the superannuation guarantee contributions will mean that more savings will be directed to retirement income. The change from 1 July 2021 is the first of a series of changes where the superannuation guarantee rate will increase in 0.5% increments each year until it reaches 12% in July 2025. It is considered that the 12% superannuation guarantee rate is critical to helping people achieve a dignified retirement as well as improve the sustainability of the Age Pension and take pressure off future Federal Government budgets as the population ages.
No. Superannuation guarantee is legislated, and employers must ensure contributions are calculated and paid according to the minimum requirements.
Superannuation contributions are paid to all superannuation funds on a monthly basis during the last week of the month. Contributions are paid in arrears which means that the contributions processed in one month will be paid to superannuation funds in the following month. For example, the superannuation contributions (both superannuation guarantee and additional voluntary contributions) processed in the July payroll will be paid to all superannuation funds in the last week of August.
The Federal Government sets the rate and it has changed over time starting at 3% in July 1992 (4% for annual payrolls above $1m). From July 2002 up until 2013, the rate had been at 9.0%. Following the Cooper Review which identified potential shortfalls in Australians’ retirement savings, the original Rudd Government introduced a plan to increase superannuation to 12%. Accordingly, from 1 July 2014, superannuation was increased to 9.5%. The increase to 10% was originally set to commence from July 2015 but successive governments have since slowed the gradual increase in the rate, delaying this increase until July 2021. Further increases are legislated to occur where the superannuation guarantee rate will increase in 0.5% increments each year until it reaches 12% in July 2025. It is considered that the 12% Superannuation Guarantee rate is critical to helping people achieve a dignified retirement as well as improve the sustainability of the Age Pension and take pressure off future Federal Government budgets as the population ages.
As superannuation guarantee is legislated, employers must ensure that compliance is maintained on calculating and paying contributions. Penalties apply to employers who do not comply with the minimum requirements. Therefore, Ventia is not able to consider any proposals that result in non-compliance to the Superannuation Guarantee (Administration) Act 1992 (Cth).
There are groups of Ventia employees whose terms and conditions are governed by an industrial agreement. These are wages employees. Wages employee’s remuneration is not administered under a Total Fixed Remuneration basis. Under the industrial agreements, remuneration is calculated as base rate plus allowances and benefits. Therefore, base pay rates and allowances will not change whilst the superannuation guarantee amount will increase accordingly.
Any additional voluntary contributions in place will not impact the change to the superannuation guarantee rate. However, it is recommended that employees with additional voluntary contributions in place review these arrangements.
Additional voluntary contributions made on a pre-tax basis, including superannuation guarantee contributions, are deemed as concessional contributions. This means that where both superannuation guarantee and additional voluntary contributions (pre-tax) exceed the concessional contribution cap, additional tax will be paid on the contributions. Note that from 1 July 2021, the concessional contributions cap increases from $25,000 to $27,500 per annum.
If you wish to start, stop, or make changes to your additional voluntary contributions, please contact the relevant payroll teams as outlined below:
Legacy Ventia: peopleservices@ventia.com.au
Legacy Broadspectrum: payrollservices@broadspectrum.com
Further information can be obtained on the Australian Taxation Office (ATO) website.
The superannuation guarantee changes relate to Australian employees only. New Zealand has a different system for retirement income and is not impacted by these changes.
Your remuneration terms and conditions are set out in your contract of employment.
In the first instance, you can contact your Line Manager or your P&C Business Partner. Queries can also be emailed to the Reward Team at remuneration@broadspectrum.com.
Further information can be obtained on the Australian Taxation Office (ATO) website.
If you have any questions about the change to your SG rate, please talk to your manager in the first instance.
Alternatively, queries can also be emailed to the Reward Team at remuneration@broadspectrum.com
