Your super contributions just went up
20 July 2023
The contributions your employer makes to your superannuation account increased on July 1. They’re now equal to 11% of your salary, a jump of 0.5% from the past financial year.
That is now the minimum amount your employer must pay into your fund on your behalf (this is called the super guarantee). If your super contributions are listed on your payslip, you should see the increase there from the July 2023 pay period.
“Another 0.5% increase is scheduled for July 2024 and the following year. It’s going to add up to a substantial increase in the money you have to fund your life after work,” explains smartMonday head smartCoach Matt Davey.
“That increased amount in your super will achieve greater results due to compound returns – where the gains of each year are further built on in following years.”
KEY POINTS
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Your employer now contributes the equivalent of 11% of your salary to your super.
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Over time this extra 0.5% equates to a solid boost to your super.
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It’s a good time for some super housekeeping: reviewing insurance, contributions etc.
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The increase particularly benefits lower-income earners.
Even taking into account periods of poor performance, such as calendar year 2022, returns even out over time, such as smartMonday’s Growth – Index investment option, achieving an average 8% annual return for the past 10 years (as at the end of May 2023).
The below graph shows the effect of compound returns at the increased contribution rate of 11% on a super balance of $100,000 for a 40-year-old member.