Employer super payments may be increased to 12%
May 1st 2010, 11:42 pm
#1
Guest
Posts: n/a
Employer super payments may be increased to 12%
In the Henry tax review to be announced tomorrow, it has been reported that the Compulsory Superannuation payments will increase to 12%.
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
eg: A person on a salary package of $80,000 including 9% super, will get a basic of $73,394.50 + $6,605.50 in super.
If the rate goes up to 12% this SHOULD become $73,394.50 + $8,807 super, ie: NO change to the employees net pay
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
eg: A person on a salary package of $80,000 including 9% super, will get a basic of $73,394.50 + $6,605.50 in super.
If the rate goes up to 12% this SHOULD become $73,394.50 + $8,807 super, ie: NO change to the employees net pay
May 2nd 2010, 1:07 am
#2
Proudly Deplorable
Joined: May 2003
Location: Alloha snack bar
Posts: 24,246
Re: Employer super payments may be increased to 12%
In the Henry tax review to be announced tomorrow, it has been reported that the Compulsory Superannuation payments will increase to 12%.
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
eg: A person on a salary package of $80,000 including 9% super, will get a basic of $73,394.50 + $6,605.50 in super.
If the rate goes up to 12% this SHOULD become $73,394.50 + $8,807 super, ie: NO change to the employees net pay
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
eg: A person on a salary package of $80,000 including 9% super, will get a basic of $73,394.50 + $6,605.50 in super.
If the rate goes up to 12% this SHOULD become $73,394.50 + $8,807 super, ie: NO change to the employees net pay
May 2nd 2010, 1:56 am
#3
Harrip
Joined: Nov 2004
Posts: 495
Re: Employer super payments may be increased to 12%
From an employers perspective it's just another incentive to use overseas workers.
May 2nd 2010, 2:01 am
#4
has lost The Game
Joined: Apr 2005
Location: Chippendale, Sydney
Posts: 8,735
Re: Employer super payments may be increased to 12%
In the Henry tax review to be announced tomorrow, it has been reported that the Compulsory Superannuation payments will increase to 12%.
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
eg: A person on a salary package of $80,000 including 9% super, will get a basic of $73,394.50 + $6,605.50 in super.
If the rate goes up to 12% this SHOULD become $73,394.50 + $8,807 super, ie: NO change to the employees net pay
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
eg: A person on a salary package of $80,000 including 9% super, will get a basic of $73,394.50 + $6,605.50 in super.
If the rate goes up to 12% this SHOULD become $73,394.50 + $8,807 super, ie: NO change to the employees net pay
I've been wondering about this myself. I (and the rest of the people that I work with) have a 'package' where my super contributions are included as part of that package. I had been concerned that if they increased the contributions to 11 or 12% that the employer may just try and suggest that that would be 11 or 12% of the existing package, which would eat into my base pay.
I guess it's not a problem if you are base salary plus super, but I can really can see them attempting to do just that. We have had a pay freeze for the last two years, so I can't see them digging into their pockets unless they really have to. Maybe it's time to start looking for alternative employment...
Where do you get the information for your remark that I highlighted? I would be interested to know where we all stand legally with this.
S
May 2nd 2010, 2:17 am
#5
Account Closed
Joined: Jul 2006
Posts: 14,188
Re: Employer super payments may be increased to 12%
I've been wondering about this myself. I (and the rest of the people that I work with) have a 'package' where my super contributions are included as part of that package. I had been concerned that if they increased the contributions to 11 or 12% that the employer may just try and suggest that that would be 11 or 12% of the existing package, which would eat into my base pay.
I guess it's not a problem if you are base salary plus super, but I can really can see them attempting to do just that. We have had a pay freeze for the last two years, so I can't see them digging into their pockets unless they really have to. Maybe it's time to start looking for alternative employment...
Where do you get the information for your remark that I highlighted? I would be interested to know where we all stand legally with this.
S
I guess it's not a problem if you are base salary plus super, but I can really can see them attempting to do just that. We have had a pay freeze for the last two years, so I can't see them digging into their pockets unless they really have to. Maybe it's time to start looking for alternative employment...
Where do you get the information for your remark that I highlighted? I would be interested to know where we all stand legally with this.
S
May 2nd 2010, 2:27 am
#6
has lost The Game
Joined: Apr 2005
Location: Chippendale, Sydney
Posts: 8,735
Re: Employer super payments may be increased to 12%
I've worked for companies in the past who gave the impression I should be paying them for the privilege of working there... so if any employer can, legally, pass that cost onto the employee somehow, then I think we can be certain that some of them will do just that.
Yes, that's pretty much how I feel about this. It would be nice for there to be some clarification as to where the extra funds would come from.
S
May 2nd 2010, 3:10 am
#7
Harrip
Joined: Nov 2004
Posts: 495
Re: Employer super payments may be increased to 12%
Is this not another example of the nanny state?
If you were to get a 5% pay rise this year, could you not expect 3% of that rise to now go into super resulting in just a 2% increase in take home pay?
Personally, I'd prefer to get a 5% pay rise and decide how much I do or do not save myself. It is not appropriate for everyone to be forced to pay 3% of their earnings into super. If your saving for your first house for example, you'd probably sooner be able to save for the deposit. Whilst saving cash is a worthwhile goal, personal circumstances should dictate when this is or is not appropriate, not the government.
If you were to get a 5% pay rise this year, could you not expect 3% of that rise to now go into super resulting in just a 2% increase in take home pay?
Personally, I'd prefer to get a 5% pay rise and decide how much I do or do not save myself. It is not appropriate for everyone to be forced to pay 3% of their earnings into super. If your saving for your first house for example, you'd probably sooner be able to save for the deposit. Whilst saving cash is a worthwhile goal, personal circumstances should dictate when this is or is not appropriate, not the government.
May 2nd 2010, 3:16 am
#8
Account Closed
Joined: Apr 2006
Posts: 10,784
Re: Employer super payments may be increased to 12%
From the employers point of view, this is like a compulsory wage rise. Seems a tad unfair tbh..... My employer is a right tightarse, he may well pass out!
May 2nd 2010, 3:19 am
#9
Account Closed
Joined: May 2009
Posts: 2,708
Re: Employer super payments may be increased to 12%
They'll probably just issue new employment agreements with the same total salary that reflects the 12% super, with the extra 3% coming out of your basic.
May 2nd 2010, 3:20 am
#10
has lost The Game
Joined: Apr 2005
Location: Chippendale, Sydney
Posts: 8,735
Re: Employer super payments may be increased to 12%
Yes, that's what I am afraid of. Which is an effective pay cut, as my take home will decrease by the amount they then add to my super.
S
May 2nd 2010, 3:24 am
#11
Account Closed
Joined: May 2009
Posts: 2,708
Re: Employer super payments may be increased to 12%
Personally I think compulsory superannuation is an absolute con as we saw with the global financial crisis, lots of people lost thousands. It's just the government telling you they know how to invest your money better than you. (For some that is kinda true though!)
May 2nd 2010, 3:27 am
#12
Account Closed
Joined: Apr 2006
Posts: 10,784
Re: Employer super payments may be increased to 12%
Yes, kind of agree. At the same time, it does force people to consider retirement as your bracketed comment alludes to I presume!
May 2nd 2010, 3:32 am
#13
Account Closed
Joined: Jul 2006
Posts: 14,188
Re: Employer super payments may be increased to 12%
Listening to the news it's sounding more and more like its going to be an extra 3% from the employee.
May 2nd 2010, 3:36 am
#14
Retired
Joined: Apr 2004
Posts: 34,649
Re: Employer super payments may be increased to 12%
In the Henry tax review to be announced tomorrow, it has been reported that the Compulsory Superannuation payments will increase to 12%.
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
May 2nd 2010, 3:50 am
#15
has lost The Game
Joined: Apr 2005
Location: Chippendale, Sydney
Posts: 8,735
Re: Employer super payments may be increased to 12%
Hmmm. Why am I not surprised by that. So for folk whose contract specifies $xxx pa PLUS super, they will get an effective increase in their super contributions at no cost to their take home pay, where people who have a packaged salary up to a total will see an effective cut in their take home pay to cover the increase.
So it all comes down to how you negotiated your salary when you started your job.
S