KEEPING UP TO DATE
2022 Superannuation Increases
1 March 2022
Running a SME during a global pandemic has meant keeping a very careful eye on our cashflow. Little changes can have a big impact if we don’t plan ahead.
One of those little changes is the annual increase in Superannuation Guarantee Contributions over the next four years. Employer contributions started moving from 9.5% in 2020 and will increase gradually to 12% in 2025. This year on 1 July, employer contributions move to 10.5%.
Tips to manage the change effectively:
- Check your employment agreements. You may need to increase your superannuation contributions, or you may be able to absorb the superannuation increase by decreasing the base salary. Get support if you are unsure what you are legally allowed to do.
- If you are considering absorbing the increase in the base salary, take a moment to pause and consider whether people may then look at alternative employment options. It can be hard to find great team members and takes time to train them. Make sure you are thinking long term on the decisions you are making.
- The great resignation is also seeing people move for higher salaries / wages in many industries. Make sure you are considering the total employment costs now and going forward over the next couple of years.
- Past budgets, pricing and margins may need to be reviewed carefully and options developed to address any changes needed early. Your clients are in the same boat and need time to plan for other increases too.
- Communicate, communicate and communicate. Regardless of how you move forward, make sure you message it well. Taking time to explain what is happening and what it means for the team is really valuable and can make a big difference in the way your team respond.
If you are not sure where to start or have concerns about implementation, call us to discuss your options. We’re here to help!
More News? Sign Up for our e-Newsletter?