19 June 2024
With the new financial year just around the corner, it is important to review and understand the array of changes coming into effect from the 1st July 2024.
Minimum Wage
A 3.75% increase will apply to both the National Minimum Wage and Modern awards, increasing the National Minimum Wage from $882.80 to $915.90 a week or $23.23 to $24.10 per hour. The decision to increase disposable incomes for modern award reliant workers is aligned to the strong considerations to the cost-of-living pressures experienced by this demographic as well as the stage 3 tax cuts and cost of living measures in the Federal Budget.
Superannuation
The new financial year will also see an increase in the compulsory employer superannuation contributions, from 11% to 11.5%, as a part of the staggered increases of superannuation to the target rate of 12% by 1st July 2025. These contributions are paid on ordinary time earnings. The business’ position on whether this is (or indeed can be) absorbed as part of a previously negotiated salary package needs to be assessed.
The concessional (before tax) superannuation contributions cap will also increase to $30,000 for all individuals, from $27,500.
The non concessional (after tax) contributions cap will be increased to $120,000 from $110,000 per year.
The maximum superannuation contribution base, used to determine the maximum limit on any individual employee’s earning base for each quarter of any financial year will also be lifted to $65,070 (from $62,270).
Paid Parental Leave
Recent amendments will also provide an extra 2 weeks of federally funded paid parental leave, lifting the entitlement from 20 weeks to 22 weeks. An extra 2 weeks of payment will be added to parental leave pay each year up until 2026, increasing the overall length of the paid parental leave scheme by 6 weeks from July 2026.
Tax cuts
Changes to the income ranges and tax rates in the marginal brackets will increase the ‘take home’ pay for most Australian workers. These changes are shown in the table below:
How to prepare for these changes:
- Ensure that any annualised salary arrangements are sufficient to cover the new minimum rates of pay and the increased superannuation contribution.
- Review Fair Work regulation changes and update relevant policies, procedures, induction content and employment contracts accordingly.
- Ensure all changes are communicated with employees.
If you would like more information on how these changes may impact your or your organisation, please contact us via the link below.
