Changes to superannuation on 1 July might mean your employees’ salaries go down.
With the new superannuation guarantee (SG) rate of 10% kicking in on 1 July this year, it’s worth investing a little time to check the wording of your Employment Agreements for staff on annualised salaries.
No dramas if the “Remuneration” clause in your Employment Agreement states something like:
$50,000.00 plus superannuation or $50,000.00 excluding superannuation
but if the wording is:
$50,000.00 inclusive of superannuation
then your employee’s salary is going to go down as a result of the changes to superannuation and the increased SG rate. And people tend to be less happy when they see their pay change in a downward direction without knowing why.
If you have “inclusive” superannuation wording in your Employment Agreements, it’s a relatively easy fix: have a chat now with your employees to reassure them you’re onto it (generally by bumping up their base salary figure to compensate for the loss associated with the new super rate), then confirm the change in writing…one copy for the employee and one for their employee file.
Plan B? Draft a new Employment Agreement. While a little more time consuming, this might be a smarter option if you have old Agreements that you feel might need updating in more than one area. And what better time than the close of the old financial year to get things sorted and start afresh for the new one?
Bare Bones Consulting can assist with all things HR: from a single template that you can use over and over to a full suite of employment documents tailored to your business. We’re all about keeping things simple, value for money and developing a long-term relationship with you…so we won’t try and sell you stuff you don’t need. Compare that approach to other HR Consultants!
Give Bare Bones Consulting a call to discuss our range of HR services to help your business succeed.
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