We know it’s a pretty boring and painful topic but we thought we would give you all the dirt on what you need to know about upcoming super increases. Most of you are probably all over the fact that the super guarantee rate will increase from 9.5% of ordinary full-time annual earnings to 10% from July 2021 but what next?
You may have also heard that there was much speculation about whether the government would approve this increase given the impact of the recent economic downturn due to the pandemic, but it is set to go ahead, so business owners need to get their house in order as we have just over a month to implement this.
So, we have some cheeky clients asking us whether this increase needs to be passed onto your employees or if this extra amount can be deducted from your employee’s base salary. It’s a good question so let’s break it down. 🤔🤔🤔
First off, you may want to have a think about how this would look with your employees as I reckon it could cause some negative watercooler talk in the office. Like yunno, my company is a pack of tightwads. We therefore highly recommend re-thinking your strategy on that one. Not only is it a bit sneaky it’s not good PR.
Obviously, there are some exceptions. Like if you are using a TOTAL REMUNERATION approach in your contracts of employment for your HIGH-income earners this may be a different story. Like we are talking about the Exec types who are raking in the DOSH. (And if you are not using a total rem approach then you may want to call us to discuss how you can implement this for your big wigs, as we could save you some $$$$$).
But reducing your loyal employees take home pay would be in our opinion a bit LOW (even if your contracts say you can do this and use a total package approach), as many employees have not had a salary increase in years, other than low income earners who are paid at the minimum Award rates. (Which are already really LOW!)
So yes, we know this news is not only boring, but it kinda sucks. Effectively your wage bill just went up by 0.5% and we know that this is probably going to hit some businesses where it hurts, but we have known this was coming for like a long time so hopefully you have budgeted for this! (Like maaaybe?)
Anyhoo, if you do need support changing your contracts of employment or notifying your employees then reach out right here as we have all the tools and templates to kick this one off like a BOSS. You are welcome.