Superannuation Changes for Australian Businesses in 2023: What You Need to Know

As we move further into 2023, it’s crucial for business owners to keep up with the latest updates and changes to the superannuation system. The Australian government has recently implemented some changes that could have a significant impact on businesses of all sizes. These changes aim to ensure compliance with the superannuation system and prevent costly penalties for non-compliance.

Superannuation is an essential part of Australia’s financial system, with around $3.3 trillion in assets under management as of 2022. It’s a complex system with many rules and regulations, which can be challenging for business owners to navigate. That’s why it’s vital to seek professional financial advice to make the most of your superannuation and understand the impact of any changes to the system.

In this blog, we will discuss the latest changes to the superannuation system and provide you with everything you need to know to stay compliant. We’ll cover topics such as the super guarantee rate, the proposed changes to the superannuation guarantee threshold, and we’ll also discuss the role of the Tax Practitioners Board in overseeing Tax Practitioners and BAS Agents to ensure compliance.

So, if you’re a business owner or someone responsible for managing superannuation contributions, keep reading to learn about the key changes that have come into effect and what you need to know to stay compliant.

One of the most significant superannuation changes that came into effect on July 1, 2022, was the increase in the Superannuation Guarantee (SG) rate from 10% to 10.5% on an employee’s ordinary time earnings. This rate is set to increase by 0.5% each year until it reaches 12% on July 1, 2025. The removal of the $450 minimum income threshold for the SG means that even casual staff or those working shorter shifts are now entitled to SG contributions. So get ready for the 11% Super Guarantee as of 01/07/2023.

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Superannuation is an investment vehicle designed to help Australians save for retirement. However, the Australian government has recognised that the superannuation system can be subject to abuse, particularly by high net worth individuals who use it as a tax avoidance strategy. To combat this, the government has announced plans to cap the amount of super that can be taxed at the concessional rate of 15%.

The government’s proposed cap of $3 million on the amount of super that can be taxed at the concessional rate of 15% means that any earnings on amounts exceeding this will be taxed at a higher rate of 30% from 1 July 2025. While this is a significant change, it is important to note that the overwhelming majority of Australians will not be impacted by this cap, as they hold less than $3 million in their super fund.

In fact, the government has announced a positive change to the superannuation system that will benefit many Australians. The recent double indexation triggered by a 7.8% inflation rate means that the amount of money that can be put into tax-free super is going to increase from $1.7 million to $1.9 million from July 1. This change will allow individuals to make extra contributions to their superannuation fund, which will provide them with more financial security in retirement.

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Staying compliant in 2023 is crucial, especially given the challenging economic climate that many Australian businesses are currently facing. With ongoing natural disasters, a global pandemic, and rising inflation, interest rates, and supply chain demands, it’s essential to work with your Accountant or Bookkeeper to manage your cash flow and audit your payroll and accounting systems.

Failure to make Super Guarantee payments on time can be extremely costly. Employers who miss the payment due date can be liable to pay the Superannuation Guarantee Charge (SGC), which can result in hefty financial penalties. The SGC is calculated based on the SG shortfall amount, interest, and an administration fee of $20 per individual, per quarter. If an SG underpayment is not rectified before an audit commences, a penalty of up to 200% of the SGC can apply.

Superannuation is a complex system, and there are many rules and regulations that govern how it operates. It is important to seek professional financial advice to ensure that you are making the most of your superannuation and to understand the impact of any changes to the system.

The Tax Practitioners Board (TPB) is a regulatory body responsible for overseeing the registration and regulation of Tax Practitioners. In 2023, bookkeepers and accountants who provide BAS services are now expected to advise their clients on the correct procedures for superannuation compliance. This means that it is essential for bookkeepers and accountants to stay up-to-date with the latest superannuation regulations and requirements.

To stay on top of compliance, bookkeepers and accountants should regularly attend professional development courses and seminars to ensure they are aware of any changes to the rules and regulations. They should also subscribe to industry publications and newsletters to stay informed about any updates or changes.

Here’s a few PD courses and seminars we attend to stay up-to-date:

• Institute of Certified Bookkeepers 
• Xero Roadshow 
• Xero Central (Xero’s online learning platform)
• Super guarantee employer obligations course – ATO
• Workshop

The TPB Information Sheet, which you can find here, is a helpful resource that provides a comprehensive guide to the definition of a BAS Agent and what services we can provide.

As Bookkeepers and BAS Agents we have a strong understanding of our clients’ businesses and operations, including their payroll and superannuation obligations. By having this knowledge, we can provide our clients with accurate advice and help them to avoid any potential compliance issues.

In conclusion, staying up-to-date with the latest superannuation changes is crucial for business owners in 2023. The increase in the Superannuation Guarantee and the removal of the $450 minimum income threshold means that it’s more important than ever to prioritise compliance. Working with a qualified Bas Agent (that’s us!) can help you navigate the complexities of superannuation regulations and ensure that you are meeting your obligations as an employer.

By prioritising compliance and working closely with your BAS Agent, you can protect your business from costly penalties and brand damage. Make 2023 the year of compliance and ensure that your business is prepared for any changes to tax and superannuation regulations.