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From 1 July 2021, the Australian Superannuation Guarantee will increase from 9.5% to 10%.
Businesses sponsoring workers on a Subclass 482, 186 or 187 visa must meet and maintain certain salary and employment condition requirements. Specifically, the Guaranteed Annual Earnings (GAE) you pay to your sponsored employee must be at least the same as those specified on your approved nomination application.
According to the Migration Regulations, the GAE includes:
However, the GAE cannot include:
This means that when the superannuation guarantee increases on 1 July 2021, employers must increase superannuation payments while paying the SAME agreed upon GAE amount, ie. the extra 0.5% in super cannot be taken from the salaries of sponsored workers.
For example:
Say your sponsored employee’s nominated GAE includes:
Total GAE comes to $90,000 p.a. based on a 38-hour work week.
Super before 1 July 2021 = 9.5% of $90,000, or $8,550.
Super after 1 July 2021 = 10.0% of $90,000, or $9,000.
Thus after 1 July 2021, you must pay the same GAE of $90,000, plus the increased $9,000 super guarantee.
We always encourage our clients to specify the salary separately from superannuation contribution amounts in their employment contracts. This makes it easier to adjust for any future changes to superannuation regulations.
Any breaches of sponsorship obligations - including failing to pay the equivalent of the nominated GAE amount – can result in severe penalties. These might include:
In short, employers MUST ensure they can meet additional superannuation payments from 1 July 2021 without breaching their sponsorship obligations. If you are unsure of how the changes to super will impact your business, consult a qualified immigration lawyer or agent. Understanding your obligations and preparing for them in advance will help you avoid having penalties imposed on your business.
Abacus Visa Pty Ltd. ACN: 147099303
Abacus Visa & Migration Services Pty Ltd. ABN: 58169966036
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