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Superannuation rate rise: Here’s how much extra super you’re about to get

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The super guarantee rate has just been increased from 10% p.a. to 10.5% p.a., which is good news for (most) workers.

As of 1 July 2022, the superannuation guarantee rate has been lifted from 10% p.a. to 10.5% p.a. The super guarantee is the amount of super that your employer is legally required to pay you towards your retirement savings. It's paid as a percentage of your annual earnings.

The super guarantee rate will continue to increase by 0.5% each year until it hits 12% p.a. in 2025. A rising super rate is great news for most workers as it means more money towards your retirement. However, there are some workers who will see a slight pay cut as a result.

How much extra super you'll get

The super rate is a percentage of your annual earnings, so how much extra you'll get will depend on what you earn.

Let's say you earn $70,000 a year. Last financial year while the super rate was 10% p.a. your employer would have paid you $7,000 into your chosen super fund. This year with the rate now at 10.5%, you'd be getting paid $7,350 into super, assuming your salary stays the same.

The more you earn, the bigger increase you'll get to super. Let's say you earn $150,000 a year. Last year you would have earned $15,000 in super from your employer, and with the new rate rise it'll jump to $15,750.

Some workers will get a cut to their take-home pay

For workers who are paid a base salary or wages plus super on top, the new super rate rise will have no impact on your take-home pay. However, if you're on a salary package that includes your salary and wages plus super within the total package amount, you could see a cut to your take-home pay.

For example, let's say you're currently earning a total salary package of $100,000 which includes salary and super. With the current super guarantee rate of 10% p.a., you'd be earning $90,000 in before-tax income and $10,000 into super.

However, with the super rate increasing to 10.5% p.a., you'd all of a sudden be earning $89,500 in before-tax income and $10,500 into super. So your total package remains the same at $100,000, but because more will be sent to super you'll see a slight cut to your take-home pay.

If you're earning a salary package, the best thing to do is speak with your employer about increasing your total package in line with the super rate rise to ensure your take-home pay isn't reduced. Some companies are already adjusting employee packages to allow for this, however it's not a requirement to do so.

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.

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