Australia: Increase in Superannuation Guarantee Rates Affecting Certain Visa Holders Imposed
July 7, 2022
The Australian government has increased the Superannuation Guarantee (SG) percentage rate to 10.5%, up from 10%, and will further increase the rate in increments of 0.5% on July 1 of the next three years. The SG dictates the minimum percentage of earnings that an employer must pay into a superannuation fund and is a compulsory employer contribution. This percentage is set and indexed by the Australian government. Packaged employees, who are subject to a salary package inclusive of superannuation, including any Temporary Skills Shortage (TSS), Subclass 457 and Subclass 494 visa holders whose employment contract specifies that their salary includes superannuation, will generally see their base salary decrease by the amount the SG was increased. Employers must ensure compliance with requisite immigration obligations by adjusting their affected sponsored visa holders’ base salary to ensure that they continue to be paid their approved Guaranteed Annual Earnings (as required for TSS, Subclass 457 and Subclass 494 visa holders) or by applying for new TSS nominations to rectify decreased earnings for sponsored visa holders.
This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
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