The new year brings with it a raft of payroll changes, many aimed at reducing wage theft and non-compliance with awards.There are also several changes to superannuation to ensure fairer outcomes for employees.
Paying super on gross rate of pay
As of 1 January 2020, employers are no longer allowed to pay super only on the reduced salary of an employee after their salary sacrifice has been taken out. Instead, employers must now pay super on the employee’s gross rate of pay, which includes any salary the employee chooses to sacrifice.
Salary sacrifice and compulsory contributions
The first day of January also marked the date that salary sacrifice can no longer contribute to the super guarantee that your employer is legally required to pay. For example, prior to 2020, if an employee salary sacrificed the full superannuation guarantee of 9.5%, the employer wasn’t legally required to contribute any further amount. Starting this year, employers must always contribute the full 9.5%, regardless of how much the employee salary sacrifices.
The superannuation guarantee amnesty
A proposed bill likely to come into effect this year is the Superannuation Guarantee Amnesty bill. This provides a six-month amnesty for employers to correct any unpaid super contributions and declare these to the ATO. After this period, penalties up to 200% will apply.
Notifying employees of their annualised salary
Starting 1 March 2020, employers must notify employees of their annualised salary and their maximum ordinary working hours outside of the 38-hour week. The employer must make sure that any employee who falls under one of 22 modern awards and works more than the 38-hours isn’t paid below the minimum wage when averaging out all hours.
Employers must also record employee start, finish and break times, which must also be confirmed by the employee for each roster or pay cycle. Excess hours worked in that period must be paid to the employee as overtime if their annual salary does not pay them at or above the minimum wage for their total hours.