Upcoming Increases to Minimum Wage and Superannuation

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Dismissing an employee
Minimum Wage Increase

The Fair Work Commission has handed down a 2.5% increase to the national minimum wage and Modern Award rates as part of the 2021 Annual Wage Review.

The new national minimum wage will be $772.60 or $20.33 per hour, effective from 1 July 2021.

In a move similar to the 2020 annual wage review, the Commission has delayed the commencement of the modern award wage increase for several industries. Specifically, the General Retail Industry Award 2020 increase will take effect from 1 September 2021, with the following list of awards to increase from 1 November 2021:

  • Air Pilots Award 2020
  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020
  • Amusement, Events and Recreation Award 2020
  • Dry Cleaning and Laundry Industry Award 2020
  • Fitness Industry Award 2020
  • Hair and Beauty Industry Award 2010
  • Hospitality Industry (General) Award 2020
  • Live Performance Award 2020
  • Mannequins and Models Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Nursery Award 2020
  • Racing Clubs Events Award 2020
  • Racing Industry Ground Maintenance Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020
  • Sporting Organisations Award 2020
  • Travelling Shows Award 2020
  • Wine Industry Award 2020.

All other modern award increases will take effect from the first full pay period on or after 1 July 2021.

The delayed increases reflect the economic research presented to the panel, which suggested that some industries have been “lagging” in their COVID-19 pandemic recovery. Notably, the Commission excluded the Fast Food industry from the broader Accommodation and Food Services Sector, finding that “fast food businesses are, generally speaking, less likely to have been adversely affected by the pandemic than cafes and restaurants because the restrictions imposed to contain the virus have generally not prohibited take away food services.”

The panel noted the impact of the 0.5% increase in the Superannuation Guarantee, however did not specifically apply a deduction for it.

Superannuation Increase

The Superannuation Guarantee – compulsory employer contributes – will increase from 1 July from 9.5% to 10%. This increase is part of a broader legislative schedule of increases that commenced in 2013, designed to incrementally increase the Superannuation Guarantee from 9% to 12%. Under the legislative schedule, the Superannuation Guarantee will increase again to 10.5% on 1 July 2022 with annual 0.5% increases to continue until 1 July 2025.

On 21 May 2021, the Australian Government announced in the 2021-22 Federal Budget, that it would be removing the $450 per month threshold which currently applies to the Superannuation Guarantee. This measure has not yet been legislated; however, it is anticipated to be in place prior to 1 July next year.

This will mean that employers are required to make super contributions to eligible employees who earn less than $450 per month (provided they satisfy the other eligibility requirements).