2021 set to be a super year!
In about 5 months’ time, every business that employs staff will face an increase in costs, namely superannuation.
On 1 July, employers have no choice but to provide their employees with the first 0.5% increase in the government’s plan to grow super contributions from 9.5% (as they are now) to 12% by 2026.
But in the current environment, with the effects of COVID still being felt and JobKeeper payments set to cease in March, 0.5% per employee could be a painful pill for some businesses to swallow.
From the employee perspective though, for all the same reasons, perhaps they’d prefer to have this year’s super increase as cash in their pocket?
For an employee on $50,000pa their annual employer super contribution goes from $4750 to $5000. Not a huge increase overall, but would that $250 be put to better use going straight into the pockets of employees, and therefore straight into the economy?
I think it’s an option the federal government should look at for this year: giving employees the option to choose whether their extra 0.5% employer contribution goes into their super, or into their pay packet.
For some, it might be the extra bit of cash that helps ends meet and pushes the economy a little further out of recession.