Why YOU could be getting a surprise pay cut from July 1 as new wage rule comes into effect – here’s how to find out if your pay packet will dip
- Australia’s salary earners will see higher proportion of wages diverted into super
- The move will start on July 1 as payments rise from 9.5 to 10 per cent of earnings
- Contributions will have five 0.5 rises each year until 2025 when it’ll peak at 12%
A new rule could introduce an unexpected pay cut for more than half of Australia’s salary-earners in a bid to boost employee’s retirement savings.
Australian workers who have superannuation included in their pay package are likely to see a larger chunk of their wages diverted to superannuation as payments rise from 9.5 to 10 per cent of earnings on July 1.
The compulsory superannuation guarantee contributions will have five 0.5 per cent rises each year until 2025, when it’ll peak at 12 per cent.
To find out if the move will affect your pay packet, employees need to contact their pay role department to see if superannuation is tied up to their packet.
Australian workers could see higher proportion of their wages diverted into their superannuation accounts (pictured: waitress in Canberra)
The move will start on July 1 as payments rise from 9.5 to 10 per cent of earnings (pictured: stock image of money)
Chartered accountant and Mr Taxman founder Adrian Raftery told the Courier Mail the new rule ‘will suck’ for some earners as they will ‘hassle their HR’ about why they are earning less.
‘With 0.5 per cent of gross wages diverting to super, the net impact on take-home pay for workers on a 40 per cent tax rate would be about 0.3 per cent after tax’, Dr Raftery said.
The new payments would see around $25 a month diverted into superannuation for workers on a $100,000 salary package.
Minnik Chartered Accountants founder and CEO Leah Oliver said the move will see the earnings of packaged salary workers ‘being locked up until retirement’.
The new payments will see about $25 a month diverted into superannuation for workers on a $100,000 salary package, accountants say (pictured: female tradesperson)
‘Generally speaking, most people prefer take-home pay over super so they can save and manage their own funds rather than leaving them in the hands of an institution,’ she said.
Ms Oliver said despite the ruling forcing people ‘who have no savings discipline’ to save, ‘educating them to save’ is the better alternative.
HLB Mann Judd Sydney tax partner Peter Bembrick said employees needed to be aware of the move as it will directly impact their take-home pay.
‘At the end of the day they are still getting the same benefit – they’re just not seeing it in their take-home pay,’ he said.
‘People will notice it, even if it’s a small amount… it’s still their money.’
Leah Oliver (pictured) said the move will see the earnings of packaged salary workers ‘being locked up until retirement’