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For many of us, superannuation isn’t front of mind. If you’re someone who is still many years (or even decades) away from being able to access the money in your super, checking in on your super might not be high on your priority list. 

However, with the recent legislated 0.5% increase to the Superannuation Guarantee, it’s important for all of us (no matter how many years we have left in the workforce) to consider what this means for our personal situation. Because these changes might affect your take-home pay, not just your super account balance. 

What has changed? 

Up until June 30th of this year, under the Superannuation Guarantee, employers were required to pay all eligible workers a 9.5% superannuation payment in addition to their take-home pay. 

As of July 1st 2021, all eligible workers must now receive a 10% superannuation payment, in an effort to increase the funds that employees will have saved for retirement via their superannuation account.  

How can I check how these changes are affecting me? 

  • The first step is to simply check your payslip.  
  • If your take-home pay has remained the same and you can see that a 10% super contribution is now being paid into your nominated superannuation account – good news – you have an employer that has adjusted for this increase without deducting your base wage. You have effectively received an increase in total remuneration because your base salary has remained the same, while your superannuation payments have increased. 
  • If you notice that your take-home pay is less, then you are probably on a fixed-remuneration employment agreement and the 0.5% superannuation increase has been taken out of your base salary. In other words, your employer has decreased your take home pay in order to increase your superannuation payments. 

Our recommendation if your take home salary has been reduced 

Have a look at your employment contract and check whether it specifies a total remuneration package or a base salary plus super. If your contract stipulates you are to receive a base salary plus superannuation, then it’s possible there has been a mistake and you can discuss this with your employer. 

However, if your contract stipulates a total remuneration agreement, then your employer is within their rights to have reduced your base salary to account for the legislated 0.5% superannuation increase. 

Steps you can take: 

  1. Ask your employer if they would consider increasing your base salary so that your take-home-pay can return to the amount it was prior to the superannuation increase. 
  1. Ask your employer if they would consider re-writing your contract so that your agreement becomes base salary plus superannuation. In this instance, any future superannuation increases should not affect your take-home-pay. 

It might be uncomfortable raising queries like this with your employer. However, they are ultimately responsible for communicating what the new Superannuation Guarantee change means for their employees. If they are reluctant or defensive about this, it’s important to remember that there are plenty of other employers out there who will happily have this kind of conversation.