Superannuation alert for Aussie workers ahead of major July 1 change: 'Has to go down'
This could apply to those who have a salary package that is inclusive of superannuation. CPA Australia's superannuation lead, Richard Webb, told Yahoo Finance it's worth checking your contract or agreement ahead of Tuesday's change.
"Broadly, the mathematics for people on total remuneration packages is such that if one goes up, the other has to go down," he said.
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At the moment, your employer is obligated to send 11.5 per cent of your pay to your superannuation fund.
From July 1, that rate will go up to 12 per cent as the mandatory minimum.
It's been going up by 0.5 per cent increments since 2020.
The Australian Retirement Trust (ART) said this five-year plan would see a 30-year-old earning $100,000 each year retire with an additional $125,000.
'This half per cent step may seem small, but for working Australians, it's like reaching the summit of your own financial Everest,' ART's Anne Fuchs said.
'Since the Superannuation Guarantee (SG) was introduced in 1992, it has become the cornerstone of Australia's retirement system – evolving from a modest 3 per cent contribution to a robust framework that provides you with meaningful savings for your future.'The SG rate increase will benefit a lot of workers as many of them will have organised a salary plus superannuation package when they scored their job.
If they're getting paid $100,000 per year, for example, that means their employer will contribute an additional $12,000 to their retirement nest egg.
But, if their pay was $100,000 per year including super, their actual pre-tax take-home would be $88,500.
With the changes to super from July 1, that number could drop by $500 to $88,000 to account for the 0.5 per cent jump.
There's no official data on how many Aussies have a salary package that includes super.
When you're looking at job adverts, if it displays how much the pay is, it will usually reveal whether super is included in that number or if it goes on top.
If the number isn't displayed, it's worth asking the recruiter or hiring manager what the setup is, so there are no surprises when you get your first pay cheque.
Webb said it's worth checking your contract to see if it mentions how your pay is structured.
If you don't have that document handy, there is another course of action.
"Go and chat to your employer and see how they think this is going to work out," he said.
"In most situations, employers are already geared up to get these questions from their employees, and may actually have something ready to go that they can give to them that explains it all."
Employers who don't have that knowledge need to start reading up on all the changes happening from July 1 to ensure staffers don't get accidentally "blindsided".
"It's a great reminder for employers to make sure that their employees have got the right idea about how things are going to change," he added.Sign in to access your portfolio
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