Super Guarantee reaches eleven per cent

Workers’ retirement savings got a boost from July 1 when the superannuation guarantee (SG) increased to 11 per cent as part of a legislated plan to raise the rate to 12 per cent by 2025.

This can significantly bolster young workers’ super accounts. For example, according to the Association of Superannuation Funds of Australia, for the average 30-year-old worker, increasing the super guarantee from 10 per cent to 12 per cent will boost their final balance from $468,000 to $534,000, or by $66,000.

Employers generally take care of the paperwork around this, but Jacovides says workers still need to make sure they adjust any lump sum contributions or salary-sacrifice arrangements to reflect the increase. If their overall superannuation payments exceed $27,500, it can be an administrative and tax burden.

“They may need to rejig their salary sacrificing,” the Brisbane-based financial adviser says. “They also need to be aware of how their salary overall is packaged up. Is it a salary plus super or is it inclusive of super? If it’s the latter, that will mean with the increase, some people’s take-home pay will actually decrease.”