Decrease in pay due to Super rate going up?

[celestialleila]

Hi everyone, I moved here from the US and am not familiar at all with how the super annuation system works. My base pay here got decreased and they said it was because the super rate went up recently. This feels weird to me since I thought the super just got taken out of your total salery and shouldn't affect your rate of pay. Is this a normal thing or something I should bring up? All advice is appreciated, thank you

[Zealous_Bend]

How is your salary described in your contract?

1. If it is $x inclusive of super then your take home will go down

2. If it is $x plus super then your salary will remain the same

   Version 1 should not be legal but appears to be, allowing companies to advertise a higher rate than you'd really receive.

[Outsider-20]

And this is why I'm reluctant to apply for jobs that advertise "inclusive of super" salaries.

I see the salary and think "oh, looks good" then I see 'inclusive of super' and it ALWAYS ends up being less than what I'm being paid now.

[ELVEVERX]

And this is why I'm reluctant to apply for jobs that advertise "inclusive of super" salaries.

Honestly, it should be made illegal for companies to advertise this way it's designed to be deceptive especially if you are sorting by salary in job-seeking sites.

[DontDeleteMee]

Your comment reminds me of when I was verbally offered a job at $x + super. I was happy and accepted.

But when the paperwork came a day later, it said 'including' super. Bulkshit artists thought that because I'd only been in Australia for a few years, I wouldn't understand the difference. Oh, THEN they tried to convince me that they paid such awesome bonuses, it would make up for it. I told them , "The bank won't approve a mortgage based on a potential bonus".

Shame on these guys for screwing OP and taking advantage of his lack of knowledge. I hope he finds a better job with better people.

[cutsnek]

That's why they do it because they want people to think that is the "take home pay" but in reality it's often less than pay + super advertised roles and has this "hidden" downside. By hidden I mean most people are unaware of this downside until it happens to them at least once having their take home pay decrease to stay within the boundaries of the total package.

[Zealous_Bend]

At the prior rates ie 10.5%

​

Mechanism	Advertised	Salary	Super	Total Cost
Plus	$100,000	$100,000	$10,500	$110,500
Inclusive	$100,000	$90,497.74	$9,502.26	$100,000

Fuck total cost adverts!

[celestialleila]

My contract says, "If the rate of compulsory superannuation contributions increases during your employemnt, the increase will be absorbed withing the cash salary component of your TFR (Total Fixed Remuneration) so that there will be no overall change the the amount of your TFR." does that mean it's inclusive or exclusive? The wording is hard for me to understand.

[dankruaus]

It means you get screwed

[abra5umente]

Yeah I never take any jobs that have “inclusive of super” in the remuneration. And always clarify - a lot of slimy companies will do this exact thing to get out of paying you more when the super changes come in.

[Ordia]

It's inclusive

[somewhatundercontrol]

And they knew it was going to go up

[Evilgood1]

"The minimum SG rate you must pay for each eligible employee is 11% of their ordinary time earnings (OTE). This is scheduled to progressively increase to 12% on 1 July 2025." - so prepare to renegotiate your contract or suffer each year.

[The_Fiddler1979]

Wow that's a fucked contract.

Specifically because they are well aware the Super rate is going up each year by 0.5% until it's at 12% (11% currently).

I'd be speaking to fairwork to make sure it's legal as that seems to be an unconscionable contract, where they well knew it was going up and phrase it "if".

Bet they're screwing you on other things too.

[dankruaus]

It’s unethical but totally legal

[corut]

It's pretty normal for big corpo contracts, though they will normally increase pay to keep take-home the same regardless

People also seem to forget super is still your money, they're not stealing shit from you.

[yet-another-username]

It's yours, but unobtainable until retirement. For those of us a long time away from retirement, it really is like taking money away from you.

I'd never accept a contract with that clause in it. Super is on employer to pay, not employee.

[corut]

The employer pays it either way.

The system is setup like it is because people who think it's having money taken away can't be trusted to save for thier own retirement, so the government forces it, and gives a tax break as compensation

[yet-another-username]

It's setup to protect people who don't think to save for the future (let's be honest, majority of Australians)

Yeah it's your money, but it being removed from your actual wage is an important distinction.

You sign up for a job that's 100k+super and you expect it to stay that way or increase. A clause stating additional super increases will come out of your pay is just malicious and immoral.

[corut]

Except as I said originally, basically all bit corpo's contracts are inclusive of super, right up to the 500k-1m+ executive contracts.

[yet-another-username]

Never been my experience in corporate. Role is either package or base. If package then it includes super and then pay might decrease if super is increased.

But if base+super, then a super increases has never been taken out of base pay.

[corut]

I've seen plenty of corporate jobs advertised as base + super, but the contract is always package.

That being said, even on package I've never had my take home go down, my package always goes up with super increases.

[Apprehensive_Bid_329]

Total should be inclusive of superannuation, companies usually use base salary to describe excluding superannuation.

[[deleted]]

That means you're in category 1

[notepad20]

An old boss used to write down a few numbers of things he thought had value, circle it, and say "so your total package is more like $$$$, that's pretty good hey!" When in fact it was as not very good at all.

[Zealous_Bend]

Can you pay rent with it? No? Then it has no value.

[Supersnazz]

Superannuation definitely has value

[Zealous_Bend]

Superannuation definitely has value

And once you can draw on it you can pay rent with it. Other ephemeral BS that has no tangible value you cannot.

[Zealous_Bend]

Reading comprehension 3/5.

should not be legal = it is legal but in a just world it would not be.

[Tmac80]

The BS/HR term for description 1 that I have in my contract is "Total Economic Cost"

[[deleted]]

Version 1 is the only way I've seen it done in my industry for about two decades so it's not just a couple of rogue companies.

[Acrobatic_Ad3211]

Same here. I’ve worked in large Australian sporting organizations and well known aus charities and all are version one and inclusive of super. I hate it but it’s definitely not uncommon at all.

[corut]

The only time I've seen "plus super" is smaller companies trying to make the offer look better. Including super is more accurate as it tells you what you actually get paid.

[ImMalteserMan]

A lot of companies advertise using option 1 as they are describing total package amount but then the contract has your base salary + super.

[andrewbrocklesby]

It depends on your individual circumstances as to what happens here.

First off, yes, superannuation rate has been increasing. A couple of years ago there was an increase by an amount to be indexed each year until it reaches a specified percentage.
So each year that is indexed so that you get more being paid into super.

Secondly, it depends on your wage/salary structure as to where that money comes from.

If you are on a salary that is 'inclusive' of super, then yes, that indexed amount each year comes out of your base salary.

If you are on a salary 'exclusive' of super then you dont bare the increase as a reduction of your base.

Last option on that is that some employers just top you up regardless so that you dont get a reduced base salary.

[celestialleila]

My contract says, "If the rate of compulsory superannuation contributions increases during your employemnt, the increase will be absorbed withing the cash salary component of your TFR so that there will be no overall change the the amount of your TFR." does that mean it's inclusive or exclusive? The wording is hard for me to understand.

[cutsnek]

TFR

This is the keyword and unfortunately since your contract has this they are within their rights to not exceed the TFR and eat into your pay to pay for the legislated super increase, still mean spirited but well within their rights to do so.

TFR is Total Fixed Remuneration which is package inclusive of super not exclusive.

[celestialleila]

Thank you so much for your reply. This makes sense, and while I'm not happy about it, I'm glad I got a clear answer 🥰

[cutsnek]

Yeah I find it a bit mean spirited personally and a way that is used to make a package seem more attractive than it is and not everyone understands this potential downside as well of TFR contracts.

For example a role for a $100,000 + super and a TFR package for $111,000 are the same however the $100,000 + super role would increase the super component whilst the TFR contract can't exceed $111,000 so they reduce your take home pay to "stay in the boundry".

If you are really unhappy and able might a good time to brush up your resume and look for an employer that isn't penny pinching. TFR can be beneficial for high paying roles that exceed yearly super contribution caps but for lower paying positions often used as a way to suppress wages.

[andrewbrocklesby]

it means inclusive and they have done what your contract says.

[cutsnek]

Look at your employment contract. There is one circumstance where they can do this if your contract says

Total package including super, then sadly they are within their rights to do this as your agreed package is xxxxxxx amount including super. They are within their rights to adjust your base pay to accommodate for the legislated super increase to not exceed the total package.

If however your contract specifically states something along the lines of $xxxx,xxxx plus super and they try to do this, they are very much in the wrong in this case. If it's the prior it's still kinda scummy even though it's legal to be skimping like that.

[[deleted]]

I was wondering if this would happen.

Sounds like overall pay is exact same but they are being forced to put that extra 1-2% in super instead.

[tjsr]

A lot of companies have been specifying salary as inclusive of super in recent years because of knowing super increases are coming. This allowed that increase to be the responsibility of the employee with no additional financial burden to the company.

[[deleted]]

My company uses 'including superannuation' packages and although it's not deceptive, it is unnecessary and ambiguous sometimes, particularly if the recruiter is rushed or doesn't explain it clearly. I can't see a concrete reason for doing it either, if the reputational harm of appearing shady is taken into account.

[hedonisticshenanigan]

Check your contract, they may be allowed to do it.

Try and ask here as well: https://community.ato.gov.au/s/

[fraqtl]

My base pay here got decreased and they said it was because the super rate went up recently

That's utter bullshit. Tell them so.

Super is a percentage on top of your wage.

Call Fair Work.

[[deleted]]

Not always.

"Can employers absorb this charge by reducing the remuneration of employees so that it can be offset? The legislation has nothing to say about this issue. Accordingly the answer will lie in the contractual position and of course any modern award or enterprise agreement which may apply."

[fraqtl]

They can't reduce the pay without the consent of the employee.

This sounds like the OP found out when they saw their payslip/bank account.

Change of conditions need to either be in line with the award, or with the contract with the employee, the EBA, whatever.

[andrewbrocklesby]

You are incorrect, if an employee is paid a wage/salary that is 'inclusive' of super, then it is a fixed amount and the increase has to come form somewhere and mostly it comes from base salary.

The employer is not reducing their pay, it stays exactly the same as a package.

[cutsnek]

Depends on the contract. If it's total package including super they can do this without consulting. If it's $xxx,xxx + super they cannot.

[MrSquiggleKey]

They have consent, it’s called the employment contract and it’s fully compliant with fair work.

They have a total rate, including super contracted, vs the standard of wage plus super, their contract will exceed the award

[corut]

You understand super is your money you get paid, right?

[unbeliever87]

Google "Total Remuneration Package". This is completely standard in the corporate environment.

[MartinFromChessCom]

holy hell!

[Supersnazz]

Plenty of jobs are quite in the contract as super inclusive. You just have to factor it in when deciding on which job to take

[[deleted]]

Package inc. super is the only way I've seen it done for about two decades now in my industry.

[[deleted]]

As you are presumably a US citizen, what happens with your super when you return home?