What are the 2022 changes to the minimum wage?

From 1st July 2022 new changes have come into effect regarding the national minimum wage.

Based on a 38 hour a week for a full time employee this signifies a $40.00 per week pay increase, an increase of 5.2%. Award minimum wages in modern awards will increase by 4.6% and junior/apprentice wages based on a percentage of their adult equivalent will increase proportionally.

These new financial year changes are estimated to see up to 2.8 million Australians receive a rise in their wages and this is expected to help many low income Australians with the rising cost of living.

What are the changes to superannuation?

From the same date of 1st July, the $450 monthly superannuation eligibility threshold has been removed and the standard superannuation guarantee rate will increase from 10.0% to 10.5%. Some obligations relating to superannuation will remain however, such as workers who are under 18 years old must still work at least 30 hours a week to be eligible.

This means that you may need to pay some employees superannuation for the first time, regardless of how much they earn per month. These changes are expected to help Australians to better prepare for their retirements.

What do employers need to plan for?

Employers will need to carefully review their budgets for not only the increased cost of wages but also their superannuation obligations to their employees. The superannuation guarantee will continue to rise by 0.5% each year until it reaches 12% in 2025, meaning business owners need to plan for these increased costs.

Coupled with the rise to the national minimum wage which may or may not affect every business, small businesses will see a continued increase in the cost of running their business and it's important that they plan for these changes and include them in their yearly budgets. With record low unemployment rates it's likely that these wage and superannuation increases at the low end will have a flow on effect throughout all pay levels.

If you need help navigating the complicated nature of employer financial obligations, please contact us today.

Disclaimer

This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided having regard to your objectives, financial situation and needs.