July 1 sees 2 increases to your payroll expenses:
- The minimum wage is increasing for employees
- The Super Guarantee will also increase for all employees
How big is the increase?
The minimum wage is increasing by 3.75% making it $24.10 per hour or $915.90 per week.
Even if you pay above minimum wage at the moment, this increase could exceed that difference so ensure you check each employee’s wage rates and adjust accordingly. Failing to check could mean you are accidently underpaying staff and that’s a serious compliance issue. (Read our article titled 4 Common Mistakes that lead to underpaying staff to discover more about underpaying staff.)
The Super Guarantee is increasing from 11% to 11.5%. It is based on an employee’s ordinary time earnings (also referred to as OTE). Like the minimum wage, you may have agreements in place that include a higher super guarantee contribution. If this is the case, it’s important to check that the legislated increase will still be covered under the existing arrangement.
When do the increases come into effect?
Both increases will apply from the first full pay period on or after 1 July this year. Therefore, if your July pay period commences on Wednesday 3 July, increases to both the minimum wage and the Super Guarantee need to be included from that date.
What it means for you
We are hearing these increases will be difficult to accommodate for many. So businesses are looking for ways to increase staff productivity and possibly reduce staffing costs through redundancies or fewer shifts. Whatever you choose to do, we recommend speaking to us first as there are legislative requirements that need to be considered. After all, you don’t want your cost cutting efforts exposing you to penalties and fines from the Fair Work Commission.
For practical guidance on all aspects of staff management and productivity, talk to the team at End2end Business Solutions. Call 02 8977 4002.