The Superannuation Guarantee (SG) is due to increase to 10% on 1 July 2021 – being an increase of 0.5% from the current 9.5%. How does this affect employers of sponsored workers?
A. Can the extra 0.5% be taken from the salaries of sponsored workers?
The short, and cautious, answer is "no".
From an immigration perspective, taking the extra 0.5% SG increase from a sponsored worker's salary appears to conflict with the sponsored visa requirements. This is because as part of the visa application process, the sponsor has agreed to pay a specific annualised salary.
B. What is the conflict?
The relevant migration regulations specify that contributions to a superannuation fund cannot be included when calculating an employees' earnings, which means that a sponsor may be in breach of their sponsor obligations if they extract the extra 0.5% SG from a sponsored worker's salary.
C. What is Mullins' advice?
Given this will be the first SG increase since 1 July 2014, we expect the Department of Home Affairs to release further clarification to the migration industry regarding the changes and how it affects employers of sponsored workers.
Until further clarification has been provided by the Department, we suggest that sponsors err on the side of caution.
D. Is there anything else we need to consider?
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