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Changes to Superannuation Obligations

Changes to Superannuation Obligations

In its May budget statement, the Federal government announced the resumption of the legislated program to gradually increase the compulsory Superannuation Guarantee rate from 9.5% to 12% by 2025.

The resumption of the program will see the compulsory employer superannuation rate increase from the current 9.5% to 10% on 1 July 2021. This means that from 1 July this year, employers will be required to make superannuation contributions on behalf of employees at the rate of 10% of the employee’s “ordinary time earnings”.

An employee’s ordinary time earnings upon which superannuation contributions are calculated, includes not only wages and salary but commission and bonus entitlements. Subject to how the employee’s employment contract is constructed, it may be possible to absorb the superannuation increase into existing contractual arrangements. However, it is important that professional advice is sought prior to taking steps for any such absorption. 

REEF can provide its members with guidance on this complex matter.

To assist members communicate the change that the superannuation increase will have on commission entitlements, REEF has prepared two template “MEMOS” that can be issued to an employee affected by the change. One template is applicable to employees on either a debit-credit or target based commission structure. The other relates to commission-only employees.  Please login to the REEF PMS to access these templates.



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About REEF

The Real Estate Employers' Federation is the real estate industry’s leading not-for-profit employer and workplace relations advisory association. It has more than 1600 members and subscribers across Australia.

Each year, REEF receives more than 20,000 calls from real estate employers needing help and guidance on matters affecting the employment relationship.

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