Are you Ready for July 1st? Key Updates for the New Financial Year

The new financial year is just around the corner! Are you ready for July 1st? It’s so important for employers and employees alike to be aware of significant changes to Australian work related policies that are coming into play with the new financial year. These updates, aimed at ensuring fair compensation and supporting long-term financial security, will impact superannuation and minimum wage standards. Here’s a comprehensive look at what you need to know.

Superannuation Guarantee Increase

One of the most notable changes is the increase in the superannuation guarantee. Effective from July 1 2024, the super guarantee rate will rise from the current 11.0% to 11.5%. This increment is part of a planned series of increases, with the rate set to continue rising by 0.5% annually until it reaches 12% by 2025.

For employers, this means adjusting payroll systems to accommodate the higher super contributions. Employees, on the other hand, can look forward to a boost in their retirement savings. It’s a positive step towards ensuring that all working Australians have adequate funds to support themselves in retirement.

Advertising Roles: Salary + Super

Whilst we’re on the topic, and with these changes in mind, it’s crucial for businesses to adapt their recruitment practices accordingly. When advertising job roles, are you clearly stating the salary plus superannuation, rather than a combined figure that includes super? This practice ensures transparency and avoids confusion, or salary reduction when the superannuation rate changes.

For example, if a role is advertised with a salary of $60,000 including super, this could be misleading. Instead, specifying a salary of $53,763 plus super at 11.5% (which totals $60,000) provides clarity. This approach also ensures that when the superannuation rate increases, the employee’s take-home salary does not decrease.

National Minimum Wage Increase

Another positive update is the increase in the National Minimum Wage. The Fair Work Commission has announced a 3.75% increase, which will apply to both the National Minimum Wage and minimum award wages. This adjustment is designed to help employees cope with the rising cost of living and ensure fair remuneration for their work.

Employers need to review and update their payroll to comply with the new wage standards. For employees, this increase provides a welcome financial boost, helping to alleviate some of the pressures caused by inflation and other economic factors.

Preparing for the New Financial Year

As we transition into the new financial year, it’s a perfect time for businesses to review their payroll systems, employment contracts, and job advertisements to ensure compliance with the new regulations. Staying informed and proactive about these changes will help mitigate any potential issues and support a smooth transition.

For further guidance, you can consult resources provided by the Australian Taxation Office (ATO) and the Fair Work Commission. These bodies offer comprehensive information and support to help businesses navigate these updates.

Embrace Positive Change

The upcoming changes to superannuation and minimum wage are significant steps towards enhancing the financial wellbeing of Australian workers. By preparing adequately and updating recruitment practices, businesses can ensure they remain compliant and foster a transparent, fair working environment.

Stay informed, plan ahead, and let’s embrace these positive changes as we step into the new financial year. If you’d like some tailored advice or support, I’m here to help! Just drop me a line at louise@reviserecruitment.com.au