As the 2023 financial year comes to an end, SMSF trustees must ensure they have checked off important items on their checklist. Stay compliant and maximise your SMSF's potential this financial year.
Superannuation changes from 1 July 2023
1. The Superannuation Guarantee (SG) will be increasing from 10.5% to 11% on 1 July 2023. The SG percentage rate will continue to increase by 0.5% every year until it reaches 12% on 1 July 2025, as shown in the table below:
| Period | SG% |
| 1 July 2022 – 30 June 2023 | 10.50% |
| 1 July 2023 – 30 June 2024 | 11.00% |
| 1 July 2024 – 30 June 2025 | 11.50% |
| 1 July 2025 – 30 June 2026 and beyond | 12.00% |
The SG is the minimum contribution employers are required to make into a super fund on behalf of employees. It forms part of an employee’s remuneration, and the amount is calculated as a percentage of an employee’s gross salary or wages. This percentage is set by the Australian Government and may change over time.
The increase in the SG will impact the calculation of employee benefit obligations relating to annual leave (AL) and long-service leave (LSL). Specifically, the on-costs added to employees’ base salaries and wages when determining the remuneration rates that underly the AL and LSL provisions will need to take into account the increase in the SG from 1 July 2023.
As a reminder, liabilities expected to be settled within 12 months of balance date are measured at the nominal amounts expected to be paid when the liabilities are settled. The liabilities for AL and LSL not expected to be settled within 12 months of balance date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.
2. Transfer Balance Account Reports (TBARs) for all funds in pension phase will now be required to be lodged quarterly. TBARs report pension commutations to the ATO for each member and have an effect on transfer balance cap available for individuals. This means, we may be in more regular contact with you if we require more information from you regarding your fund.
3. Temporary reduction in minimum pension drawdowns percentages (previously 50% discount on usual minimum percentages due to Covid 19 super relief provisions between 2020 and 2023), will end on 30 June 2023 with normal minimum annual pension age based percentages being resumed from 1 July 2023.
Click here to download our checklist
For more information or assistance with the above information please contact Megan Mann on 02 6768 4500