Super Guarantee Increase Alert

Our Immigration Director of Absolute Immigration Legal, Alex Kaufman, provides us with details regarding the Superannuation Guarantee employer contribution increase and potential repercussions for Temporary Skill Shortage (TSS) visa holders.

Employers should be aware that the Superannuation Guarantee (SG) employer contribution rate will be increased from 10.5% to 11% on 1 July 2023.

The obligation is no different for employers who happen to sponsor primary Subclass 482 visa holders but may present a trap for such employer-sponsors where their employees are paid on a Total Fixed Remuneration basis (as opposed to base + superannuation basis).

Specifically, if there is a net reduction in the Guaranteed Annual Earnings of the sponsored employee from the figure presented in the person’s most recent (‘TSS’) nomination application, then a new nomination will be required to be submitted.

By way of example: If your expatriate employee was nominated in a position with a base salary of $70,000 plus super, they would currently receive $77,350 inclusive of super increasing to $77,700 from 1 July 2023. There would be no reduction in Guaranteed Annual Earnings (by definition ‘Earnings’ excludes compulsory superannuation for present purposes), and this scenario poses no issue under the current TSS visa rules.

However, where that primary sponsored TSS visa holder is currently paid under a Total Fixed Remuneration package of $77,350 (inclusive of super), the visa holder’s base salary in the above scenario would be reduced to $69,684 from 1 July 2023, and this may trigger the requirement for the sponsor to submit another TSS nomination application at the reduced salary, in addition to creating issues around meeting the relevant Temporary Skilled Migration Income Threshold (‘TSMIT’).

These issues may be avoided where the primary sponsored visa holder has had intervening salary increases taking them above the earnings identified in the most recent nomination application, or where an employer elects to absorb the cost of the additional super contribution despite the terms of the fixed remuneration contract indicating otherwise, or by moving to ‘Base + Super’ employment arrangement.

For further information, please email to arrange an online consultation.

Get in touch

For any questions or assistance, contact our friendly team of qualified experts.

Sign up for Newsletter

Subscribe today and stay connected. Enjoy a newsfeed that’s tailored your specific situation.