From July 1, the minimum amount you can pay staff will increase. There’s been a lot of media attention on the size of the increase. However, it may not affect your business. Here’s why:
- The National Minimum Wage applies to employees who aren’t covered by an award or registered agreement.
- The minimum wage is designed to protect low paid workers. If you are paying your staff above the new minimum wage, you don’t need to do anything. But we suggest you ask us to review your staff’s pay rates to ensure you are compliant.
- The media have been promoting the notion that all wages will go up by 8.6%. This is not true. The 8.6% wage increase only applies to the lowest paid workers such as disability and aged care workers.
- The National Minimum Wage across most awards is 5.75%. It’s still a hike in overheads for your business but as mentioned above, it may not make a difference to your payroll – just ask us to check it for you.
Important things to know
- From July 1, the new National Minimum Wage is $882.80 per week and $23.23 per hour.
- This new pay scale begins from the first full pay period beginning after 1 July. For example, if your pay period begins on Monday 3 July, the new rate will apply.
- If you pay your people more than the new National Minimum Wage, you don’t need to do anything.
Don’t forget the increases to super!
From 1 July, the super guarantee rate also increases. It will now be 11% (up from 10.5%) and needs to be paid quarterly. Remember, the ATO can see everything, they know everything and they take super guarantee payment shortfalls very seriously. Make sure you are making accurate and on-time superannuation payments to all staff.
Prepare for eligible staff to move to permanent part-time status
If you employ casual staff, you are required to offer them a permanent position within 21 days of their 12 month anniversary. Again, this could increase your payroll costs. To learn more about Casual Conversion rules, read our article here or contact us.
How will increased payroll costs impact your business?
We are HR consultants, not accountants or bookkeepers. But we understand these increases to your payroll have the potential to cause financial stress for your business. So the first thing we suggest you do is contact us to review your employee agreements and industry awards to evaluate whether:
- Your staff are eligible for a pay rise under the National Minimum Wage changes.
- Any casual staff will be eligible for casual conversion within the next 6 months.
Once you have that information, you can consult with your accountant or bookkeeper to evaluate any changes you need to make to your pricing or overheads. For help from us, simply call 02 8977 4002.