Davy Partners

What does the super guarantee increase mean for you?

With the minimum employer super guarantee increasing from 1 July, all employers will be required to contribute 10.5% of their employees wages to super each month (or quarter depending how you have it set up).

If you communicate salaries as a salary package (base salary + super) you can legally reduce the base salary as super increases, however many HR and org dev professionals (including us) are warning against this approach.

As you can imagine, employees are unlikely to be stoked to have their take-home pay reduce, and you’d likely also see a reduction in morale, engagement and even productivity as a result.

The super guarantee is scheduled to continue increasing over coming years, so it’s important to factor these small (but no doubt significant, when every dollar counts) rises into your payroll planning.

Another significant change to super from 1 July is that there is no longer a minimum monthly pay threshold (except for some junior casuals). Currently, when an employee earns under $450 in a month, there is no super guarantee payable. This won’t be the case anymore.

If you need a hand setting up for the super change, your accountant or payroll pro is best placed to support.

If you have broader concerns about your payment of your team (such as minimum Award requirements or entitlements) then give us a buzz and we can give you some peace of mind!