The superannuation rate is changing on 1 July: What this means for you
The amount of money your employer is required to pay you towards super is increasing in the new financial year.
The super guarantee rate is the amount that your employer is legally required to pay you towards your superannuation each year.
Currently it's set at 10.5% of your annual earnings, however it's set to increase to 11% from the start of the new financial year on 1 July 2023.
This is part of a series of annual increases to the super guarantee rate, which will see it increase from 9.5% in 2021 to 12% by 2026.
What does the super rate increase mean for you?
The super rate increasing is good news for workers as it means you'll be getting more money from your employer towards your superannuation each year.
Because super is paid as a percentage of your annual earnings, the more money you earn the more super you're paid and the more you'll benefit from these increases.
If you're earning $100,000 this change will see your employer contribute an extra $500 into your super this coming financial year compared to the previous year.
This might not seem like much, but if you look at the increases as a whole between 2021 and 2016 it's an extra $2500 a year in super (based on the same salary of $100,000).
If you earn $65,000 year, it's an extra $325 next financial year and an extra $1,625 over the 5-year period of increases.
Not only does this mean extra money in your super now, but it'll help your super grow even quicker and benefit more from compounded investment returns over the long-term.
Impact if you're earning a salary package that's inclusive of super
If you earn a salary plus super, your take-home pay won't be impacted by the increase to the super rate.
However, your take-home pay could be impacted if you currently earn a salary package that's inclusive of super.
If your total package inclusive of super is $100,000, for this financial year that'd be $89,500 take-home pay (before tax) and $10,500 towards super.
With the super rate increasing to 11% next financial year, on the same salary package that'd now be $89,000 take-home pay (before tax) and $11,000 towards super.
The total package amount stays the same, it's just that a bit more of it is diverted into super instead of your bank account.
Often employers will increase the salary package to ensure your take-home pay isn't decreased, however, it's important to have this conversation to make sure.
The super rate rise will help boost your super balance, but there are other things you can do too. You can make extra super contributions, consider salary sacrificing into super and make sure you're in a high-performing super fund.
