This year's annual wage review is now flowing through payrolls across the country. Because the increase applies from the first full pay period starting on or after 1 July, monthly and four weekly payrolls are only feeling it around now, which is exactly when mistakes surface.
The numbers
- All modern award minimum wages increased by 4.75 per cent.
- The national minimum wage rose to $1,004.90 per week, or $26.44 per hour, for employees aged 21 and over.
- Junior rates, apprentice rates and award free trainee wages moved up in step.
The trap for above award employers
Plenty of small businesses pay a flat rate or an annual salary that was comfortably above the award when it was set. Every July the floor moves up underneath those arrangements, and a salary that absorbed penalties and overtime two years ago may quietly stop covering them. Run the comparison again now: base rate, plus the penalties and overtime your people actually work, against the new minimums. Keep the working on file.
Do not forget the flow on effects
Super guarantee is 12 per cent on top of the new rates, and with payday super now live it leaves your account every pay run. Workers compensation premiums and payroll tax follow wages up too, so update your cash flow forecast rather than discovering the difference in December.
If you find an underpayment
Fix it fast and document it. Back pay the difference, correct the template, and if the gap ran for a while, get advice on super and interest. Wage underpayment is now squarely a compliance issue, and self correcting quickly is vastly better than being corrected.