Do your employees value the super guarantee that you are paying on their behalf?
I often hear comments from my clients, particularly recently, about whether their employees realise that they are not just getting paid their pay rate or salary, but also an additional 10.5% into their nominated super funds.
The current situation
And I can see why they would wonder.
Take the layout of the standard payslip in Australia – it shows
- the gross, hours in pay period if paid by the hour, and their rate of pay.
- the next line down is the PAYG tax that is deducted and withheld to onforward to the ATO, and any other deductions
- then the nett pay that is going into the employee’s bank account
- below this, is any leave that is accrued, if applicable, for the period, and balances for at least the annual leave
- Then, almost as if a ‘by the way’ – is the super guarantee that is paid on behalf of the employee for every hour that they have worked, and annual leave if taken in the period – and currently, for this financial year, it is 10.5% of the employee’s gross pay. This is not a small amount!
The employee is not getting just their pay rate, they are getting paid 10.5% on top of their pay rate. Yet this is not what is easily seen on their payslip.
I know this concerns employers, who want their employees to realise and understand what they are actually getting paid for every hour that they work for them.
Not only that, but from the employees perspective, if the employee can understand that 10.5% is taken from their gross, how much more do you think an employee will value their super guarantee payments going into their superfunds?
We all know that if we achieve or buy something that we have worked for or paid for, we value the result much more than if it is given to us.
A possible alternative
Let’s look at how Super is handled in New Zealand – there is a % deducted from an employee’s gross pay and the employee can clearly see this in their payslip – AND additionally to this, the employer matches this %. The employee knows that a % is being deducted from their gross to pay super AND they know that their employer is matching and adding at least this amount to their superfund.
Super is not given to employees Super is earned by employees.
Many employees are employed within a salary package which clearly defines the renumeration and details if super guarantee is additional or included in the package. For these employees, it is clearer for them to understand the employer’s contribution into their superfunds on their behalf.
So, what next?
How do we change this perspective?
One way would be, to move the super guarantee information higher up the payslip, with the gross earning and deductions and tax.
Another would be for the ATO and the federal government to educate Australian employees by way of media campaigns.
What would be easier? – simply changing the payslip could easily change the perception of many employees – change the way they value their superannuation and make it more important in their lives.
What do you think, fellow business owners and employers?
Need assistance with getting your business super organised? Contact Elke on 0410 819 783, Email contact@miebs.com.au.
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