{"id":3725,"date":"2012-03-26T13:50:45","date_gmt":"2012-03-26T02:50:45","guid":{"rendered":"http:\/\/wordconstructions.com.au\/blog\/?p=3725"},"modified":"2012-03-23T17:56:16","modified_gmt":"2012-03-23T06:56:16","slug":"what-increased-super-rates-mean","status":"publish","type":"post","link":"https:\/\/wordconstructions.com.au\/blog\/2012\/03\/what-increased-super-rates-mean\/","title":{"rendered":"What increased super rates mean"},"content":{"rendered":"<p><a href=\"http:\/\/wordconstructions.com.au\/blog\/wp-content\/uploads\/2012\/03\/retire_piggybank_small.jpg\"><img decoding=\"async\" class=\"alignright size-thumbnail wp-image-3731\" title=\"retire_piggybank_small\" src=\"http:\/\/wordconstructions.com.au\/blog\/wp-content\/uploads\/2012\/03\/retire_piggybank_small-150x150.jpg\" alt=\"Helping build retirement savings\" width=\"150\" height=\"150\" \/><\/a>Last week, the Australian Government passed legislation that means the <a title=\"Superannuation increases?\" href=\"http:\/\/wordconstructions.com.au\/blog\/2011\/04\/superannuation-increases\/\">superannuation guarantee (SG) rates will gradually increase from 1 July 2013<\/a>.<\/p>\n<p>For employees, it&#8217;s clear &#8211; they will get more super in their account which should help them in retirement. I do support the idea of people retiring with more money and having less dependence on age pensions and the like.<\/p>\n<p><strong>But who will pay the extra 3% SG?<\/strong><\/p>\n<p>In simplest terms, employers will pay more super into their eligible employees&#8217; super accounts. The Government will give tax concessions to that extra money which is what the mining tax is supposed to go towards.<\/p>\n<p>There has been a lot of complaint in the last week from employers and employer groups about the need to find this extra 3% per employee &#8211; many had apparently thought the Government was somehow going to fund the increase.<\/p>\n<p>Maybe the extra will come instead of pay increases for employees. But workers unions don&#8217;t agree with that concept and think the small percentage can be absorbed by businesses.<\/p>\n<p>I don&#8217;t know the final answer and am not taking any political stand point on this either.<\/p>\n<p><strong>Small business people<\/strong><\/p>\n<p>For the self-employed, I don&#8217;t think we&#8217;re going to win from this deal.<\/p>\n<p>I am self-employed so my super account only grows if I choose to make it so (or if I treat myself as an employee with a regular wage) &#8211; there is no compulsory super for me which means a change from 9% to 12% doesn&#8217;t have to affect my super savings.<\/p>\n<p>As a small business I don&#8217;t have huge profits that would make it easy to increase employee salary packages by 3% (or the 0.5% steps).<\/p>\n<p>My options would be to<\/p>\n<ul>\n<li>reduce pay increases to cover the SG (so their pay over the following 7 years may not increase much regardless of CPI)<\/li>\n<li>somehow reduce hours for existing staff (and that wouldn&#8217;t be fun for anyone really)<\/li>\n<li>pay the extra out of <a title=\"Paying yourself and profit\" href=\"http:\/\/wordconstructions.com.au\/blog\/2009\/02\/paying-yourself-and-profit\/\">my profits<\/a> (meaning my take home pay is decreased)<\/li>\n<li>increase prices enough to cover the super increases (of course, if clients don&#8217;t like that option my business suffers)<\/li>\n<\/ul>\n<p>I do feel for small businesses with a number of employees as this could cause a lot of stress.<\/p>\n<p>But I do agree with increasing savings for retirement. So is this a necessary pain for a few years for the greater good?<\/p>\n<p>If you have a small business, what are your thoughts on the increased SG?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last week, the Australian Government passed legislation that means the superannuation guarantee (SG) rates will gradually increase from 1 July 2013. For employees, it&#8217;s clear &#8211; they will get more super in their account which should help them in retirement. I do support the idea of people retiring with more money and having less dependence [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[53],"tags":[1479,1478,1454],"class_list":["post-3725","post","type-post","status-publish","format-standard","hentry","category-business-info-tools","tag-employees","tag-rates","tag-superannuation"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/posts\/3725","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/comments?post=3725"}],"version-history":[{"count":4,"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/posts\/3725\/revisions"}],"predecessor-version":[{"id":3756,"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/posts\/3725\/revisions\/3756"}],"wp:attachment":[{"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/media?parent=3725"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/categories?post=3725"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wordconstructions.com.au\/blog\/wp-json\/wp\/v2\/tags?post=3725"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}