Immediate action required: Changes to Award wages and the employer superannuation rate
The new Modern Award rates are to be paid from the first full pay period on or after 1 July 2023.
Where employees are covered by a Modern Award but are paid already more than the new Modern Award minimum rates, there is no obligation to increase the salaries for such employees. However, no employee covered by a Modern Award should be paid less than the new Modern Award minimum rates.
Employees covered by Enterprise Agreements
Employers are obliged to ensure that the base rate of pay for all employees covered by an Enterprise Bargaining Agreement does not drop below the base rate of pay in a relevant Modern Award. Given the significant quantum of the increase in minimum award rates (5.75%), some employees covered by Enterprise Agreements may need to increase their base rate to match the base rate in the relevant Award.
We encourage all employers to review their Enterprise Bargaining Rates against the new Modern Award rates to ensure ongoing compliance with their legal obligations for minimum base rates of pay.
Employer Superannuation – Superannuation Guarantee Charge (SGC)
From 1 July 2023, employers must increase the minimum employer superannuation contribution for their employees from 10.5% to 11%.
This increase in superannuation to 11% applies to any salary or wages payment made on or after 1 July, including where the salary or wages payment covers the period of work undertaken before 1 July 2023.
To read more about our insights into the annual wage review, click here.
The FWC has released updated wages tables for the modern awards to assist employers in understanding their changed obligations. These wages tables can be found here.
If employers are not sure what they are required to do or if a Modern Award covers them, please contact your usual Mazars advisor or alternatively one of our experts via the form below or on:
Brisbane – Cheryl-Anne Laird | Melbourne – Greg Halse | Sydney – Jeremy Mortlock |
+61 7 3218 3900 | +61 3 9252 0800 | +61 2 9922 1166 |
Author: Cheryl-Anne Laird
Published: 30 June 2023
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