Mandatory increase in super payments
Did you know that from 1 July you may get a pay cut because there is a mandatory increase in the amount of super your employer has to pay.
The compulsory superannuation guarantee rises from 9.5% to 10.0% on the 1st of July. Depending on how your salary is packaged, this could mean your Employer may reduce your take-home pay by 0.50% to fund the increased super contribution.
You will still receive the same benefits, but you just won’t see it in your bank account as it will be accumulating in your super fund.
Whilst a 0.50% pay cut may not reduce your take-home pay by too much, be aware that the superannuation guarantee is legislated to increase each July up until 2025 when the amount will be 12.0%. Some employers may offset this by increasing your pay at the same time, but that is up to each employer, and not mandatory.
You are more likely to be impacted if your employer talks about your ‘salary package’ which is a figure that includes both your salary and super.
For example, you may be on a $100k package, which would equate to a salary of $91,324 Plus Super of $8,676 = $100k.
From 1 July, your employer could keep you on the $100k package and just change the underlying components to look like this:
Salary of $90,909 Plus Super of $9,091 = $100k.
The more favourable scenario is that you are paid a salary and your super is on top of this.
For example, you may have a salary of $100k Plus 9.5% Super, giving you a total of $109,500.
From 1 July your salary will remain at $100k and your Super will increase to 10.0%, giving you a total of $110,000.
If you are not sure if this change is going to affect you then we recommend you check with your HR department, your employer or even dig out your Employment Contract to check the remuneration details.