Government enforced pay rises are heading your way. If you run or own a small business you need to start planning for these pay rises now.
Employers currently pay 9% of employee wages into their superannuation accounts for any employee whom earns greater than $450 per month. The government has mandated that superannuation payments to be paid by employers will rise for every individual every year until July 2019, when the superannuation guarantee will reach 12%.
Have you looked at the cost impact the rise in the superannuation guarantee will have on your bottom line? Have you made any preparations as a small business for the higher superannuation guarantee you will have to pay your staff from July?
Some employers are aware of the impact, but haven’t made a decision as to how to deal with it. For other businesses – many of whom may have hundreds of workers ‑- the increase in the superannuation guarantee may cost them thousands of dollars if not offset by wage cuts in other areas.
I believe the most common response by most small business owners will be to pay the additional super on top of current wages, effectively giving everyone a pay rise.
Can your small business afford this? What procedures and plans can you put in place now to help your business transition into this change?
A carefully planned approach is required so that small business owners hit the right balance between the messages they send to their employees with the need to manage costs. Depending on the size of your business, whether you have mostly contractors or full time employees or just a hand full of staff everyone will have a different strategy.
Remember the decisions you make for your small business this year will set a precedent in how they respond in the next six years as the guarantee is scheduled to rise. So when you are planning and preparing, plan for the long term don’t just make adjustments for the next 12 months.
Need advice as to what contingency plan could work for you and your small business needs? Not sure what this will mean for your business or what to do next? Contact ZJL Partners or visit our website at www.zjl.com.au for current resources and tips on running your small business.