EMPLOYERS BEWARE: How changes to super
will impact you from
1 July 2021

Note: The following is general information only. Seek the advice of a qualified migration agent or lawyer to discuss how specific requirements apply to your own circumstances. Abacus Visa is here to assist.

What's changing?

From 1 July 2021, the Australian Superannuation Guarantee will increase from 9.5% to 10%.

How does this impact my business?

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:

  • Salary or wages
  • Non-salary payments, including but not limited to travel allowance, accommodation or rental allowance, medical insurance, tools and equipment, etc.

However, the GAE cannot include:

  • payments the amount of which cannot be determined in advance
  • reimbursements
  • superannuation contributions

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: 

  • Salary: $80,000
  • Travel: $5,000
  • Equipment: $5,000.

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.

What are the consequences for breaching salary visa conditions?

Any breaches of sponsorship obligations - including failing to pay the equivalent of the nominated GAE amount – can result in severe penalties. These might include:

  • Being banned from sponsoring workers in the future;
  • Having all existing sponsorship approvals cancelled; or
  • Civil fines of up to $66,000 for corporations and up to $13,320 for individuals for each failure.

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.

To find out more about how the upcoming changes to super might apply in your particular situation, book a consultation with one of our migration agents today.

contact us

+61 2 9212 4008

51 Albion Street,
Surry Hills,
Sydney NSW 2010

Monday to Friday
9am - 5:30pm
(or flexible by appointment)

Abacus Visa Pty Ltd. ACN: 147099303
Abacus Visa & Migration Services Pty Ltd. ABN: 58169966036
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DISCLAIMER: No material on this website, including but not limited to documents, articles, general comments, responses and other communications should be interpreted as relevant or accurate legal advice for any individual or specific situation. The information is of a general nature and cannot substitute for professional legal advice. Such advice is only provided by our firm following the acceptance by a client of our written agreement, and the payment of the required fees.