Everything you need to learn about the adjustments to payroll that will take effect on July 1, 2022
While it won’t be celebrated with the same fireworks and champagne as New Year's Eve, the new financial year brings with it new chances for small companies on July 1st. There are typically regulatory adjustments to manage or implement along with the new calendar. This year is no exception, with payroll adjustments scheduled for FY23.
A variety of government rules may affect how you manage payroll (including superannuation) for employees beginning July 1, 2022. So, what information do you need to ensure compliance?
The ATO is updating superannuation and the annual indexation of Study or Training Loan assistance – think HECS or HELP debts – in the new financial year.
Currently, most employees earning less than $450 per month are exempt from paying superannuation. The federal government is removing this cap in the financial year 2022/23, which means you'll have to pay super for all employees above the age of 18, regardless of how much they earned in a month.
It's also important to remember that, starting July 1, 2022, employees under the age of 18 will be entitled to super if they work more than 30 hours a week, regardless of their pay.
10.5 % increase in the Superannuation Guarantee
The Superannuation Guarantee — the amount of super you must pay an employee – will increase from 10% to 10.5 percent of their qualified wages on July 1, 2022. (ordinary time earnings).
The indexation of Study or Training Loan Supports has been updated (STSL)
The consumer price index determines the indexation rate for these loans each year (CPI). Indexation keeps the loan's real worth by adjusting it to changes in the cost of living, and it affects the portion of an accumulated study and training loan that has been unpaid for more than 11 months.
The indexation for this year is set at 3.9 percent.
The following are the most typical loans that this affects:
- HELP (previously HECS) stands for Higher Education Loan Program.
- Student Loan for VET (VSL)
- Student Financial Assistance Program (SFSS)
- Student Business Loan (SSL)
- Student Start-Up Loan for ABSTUDY (ABSTUDY SSL)
- Loan for Trade Support (TSL)
The extent to which these changes influence you is determined by your business type and staff. However, the changes to superannuation will almost certainly require you to set aside a little more money each quarter, accounting for an extra 0.5 percent on ordinary earnings for those who receive super on a regular basis, as well as paying 10.5 percent superannuation to those who were previously under the $450 threshold.