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