How Will the Superannuation Guarantee Increase Affect Employers of Sponsored Workers?

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?

Secure your workplace by receiving ongoing employment law advice and support from one of Queensland’s leading employment lawyers.

For a fixed, low-cost annual or monthly subscription, clients of Workplace Secure – a Mullins employment solution – will receive ongoing employment law advice to ensure compliance with workplace laws and to reduce the risk of employment disputes and litigation, providing peace of mind.

Contact us

Should you have any questions, please feel to contact the Workplace Secure team or the Mullins Migration team. Together we can be more, do more, and achieve more.

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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