What is the change? Australia will raise employers’ superannuation rate, or compulsory contribution to employees’ retirement accounts, beginning 1 July.

What does the change mean? Companies should be planning now for the immediate increase to 9.5 per cent as well as for scheduled increases that will reach 12 per cent over the next five years.

  • Implementation timeframe: 1 July.
  • Visas/permits affected: Temporary Work (Skilled) visas (subclass 457 visas).
  • Who is affected: All employers.
  • Impact on processing times: 
  • Business impact: The increases will impact business costs and require planning.
  • Next steps: Companies may either increase their contributions in accordance with the new rate or lower salaries instead if allowed by employment contracts.

Background: Australia has planned a series of increases to employers’ superannuation contribution rate that will reach 12 per cent by 2020. The current rate of 9.25 per cent will increase to 9.5 per cent on 1 July. Employers of foreign nationals may opt to lower workers’ salaries to compensate for the higher contribution rates, but any adjusted salaries must meet market-rate requirements and be reported to the Department of Immigration and Border Protection. A new subclass 457 nomination application may be required if salaries drop below the guaranteed annual earnings stipulated in the nomination application that was approved for a primary subclass 457 visa holder’s current role within the business.

BAL Analysis: Employers should review employee salaries in consideration of the coming rate hikes.

This alert has been provided by BAL Australia. For additional information, please contact

MARN: 9683856

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