The superannuation guarantee (SG) rate in 2024 has two different values depending on the period: 11% for the period before July 1, 2024, and 11.5% from July 1, 2024, onwards.
Understanding the Superannuation Guarantee (SG) Rate in 2024
The superannuation guarantee (SG) is the minimum percentage of an employee's ordinary time earnings that employers must contribute to their superannuation fund. In 2024, this rate experienced an increase mid-year as part of a legislated schedule.
Here's a breakdown of the SG rate for 2024:
| Period in 2024 | Superannuation Guarantee (SG) Rate |
|---|---|
| Before 1 July 2024 | 11% |
| From 1 July 2024 onwards | 11.5% |
This adjustment is part of a plan for the SG rate to incrementally rise each year until it reaches 12% on 1 July 2025.
Impact of the SG Rate Increase
The increase in the superannuation guarantee rate has a direct and positive impact on an individual's retirement savings. Over a person's working life, these incremental increases contribute significantly to the total amount of super accumulated, enhancing financial security in retirement.
- Increased Contributions: Employers are required to contribute a higher percentage of an employee's salary to their super fund, leading to larger contributions.
- Compounding Growth: The additional contributions benefit from compounding returns over many years, significantly boosting the final super balance.
- Enhanced Retirement Savings: A higher super balance means potentially more funds available for spending during retirement, improving quality of life.
This progressive increase in the SG rate aims to strengthen the superannuation system and ensure better retirement outcomes for workers.
