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Minimum Wage and Super both get a boost

Your pay packet could be looking better from July 1, with significant changes coming into effect that will impact millions of workers and their financial situations. The most notable change is a 3.5% minimum wage increase approved by the Fair Work Commission, lifting the national minimum wage to $948 per week or $24.95 per hour. At the same time, the superannuation guarantee rate is jumping to 12%, meaning more money flowing into retirement savings. These changes, combined with various state-level adjustments to payroll tax thresholds and utility prices, create a mixed financial landscape that could affect everything from your weekly budget to your long-term savings strategy.

National Minimum Wage Jumps to $24.95 Per Hour

The Fair Work Commission's decision to increase the minimum wage by 3.5% represents one of the more substantial annual adjustments in recent years. This means workers on the national minimum wage will see their weekly earnings rise from approximately $915 to $948 per week, translating to an extra $33 each week or roughly $1,716 more per year before tax.

The increase applies from the first full pay period starting on or after July 1, so the exact timing of when you'll see the extra money in your account depends on your employer's pay cycle. Importantly, this isn't just about the base minimum wage – all minimum award wages will increase by the same 3.5% percentage, potentially affecting workers across various industries and skill levels who are covered by award agreements.

Superannuation Guarantee Reaches 12% Milestone

After years of gradual increases, the superannuation guarantee rate finally hits its target of 12% from July 1. This represents a significant boost to retirement savings, with employers now required to contribute a minimum of 12% of eligible wages to their employees' super funds.

For someone earning $60,000 annually, this change means an extra $300 flowing into their superannuation account each year compared to the previous 11.5% rate. However, there's a slight catch – the maximum super contribution base is actually decreasing from $65,070 to $62,500, which affects higher-income earners who will see their maximum employer super contributions capped at a lower salary threshold.

Impact on Different Income Levels

The superannuation changes create varying outcomes depending on your salary level. Workers earning up to $62,500 will benefit from the full 12% guarantee on their entire salary. Those earning between $62,500 and $65,070 will see increased percentage contributions but on a reduced salary cap, creating a mixed result. High-income earners above the cap will see their maximum employer contributions slightly reduced due to the lower contribution base.

Parental Leave Pay Extension Provides Extra Support

Families welcoming new arrivals from July 1 onwards will receive additional government support, with Parental Leave Pay extending from 110 to 120 days. This 10-day increase provides an extra two weeks of financial support during those crucial early months with a new child.

The expansion applies to both birth parents and adoptive families, with the ability to claim up to three months before the expected arrival date. For families managing the financial pressures of a new baby, this extra support could help with everything from medical expenses to setting up nurseries, potentially reducing the need to dip into savings or consider personal loan options.

State-Level Changes Affecting Your Bottom Line

Beyond the national changes, various states are implementing their own financial adjustments that could impact your household budget in different ways.

Victoria's payroll tax-free threshold is increasing from $900,000 to $1,000,000, which primarily benefits small to medium businesses but could indirectly support job growth and wage increases. More directly relevant to consumers, Victoria's Default Offer electricity price has been set at $1,675 from July 1 – a benchmark that helps determine competitive electricity rates across the state.

Western residents can look forward to residential solar battery rebates of up to $1,300 for Synergy customers and up to $3,800 for Horizon Power customers. These rebates could significantly reduce the upfront costs of home energy storage systems, potentially leading to long-term electricity bill savings.

Northern Territory and ACT Boost Business Conditions

The Northern Territory is making a substantial change to its payroll tax-free threshold, lifting it to $2.5 million with maximum annual deductions also increased to $2.5 million. This change primarily affects larger businesses but could contribute to improved employment conditions and business investment in the territory.

The ACT is introducing a short-term rental accommodation levy from July 1, applying to bookings of no more than 28 days. Property investors with short-term rental properties will need to factor this additional cost into their investment calculations, potentially affecting rental yields and property investment decisions.

What Industry Changes Mean for Your Finances

While much of the July 1 changes focus on wages and superannuation, several industry-specific updates could have broader financial implications. The introduction of tobacco licensing schemes in NSW and Victoria, combined with national changes to tobacco product regulations, signals continued government efforts to reduce smoking rates through regulatory pressure.

Skilled visa income thresholds are increasing by 4.6%, with various categories now requiring higher income levels. This affects the broader labour market dynamics and could influence wage growth in skilled sectors as employers compete for both local and international talent.

The indexation of penalty units in Queensland means fines and legal penalties are becoming more expensive, serving as a reminder of the financial importance of compliance with local laws and regulations.

Planning Your Financial Response to These Changes

With more money potentially flowing into your weekly pay and superannuation account, now might be an ideal time to reassess your broader financial strategy. The extra income from minimum wage increases could provide breathing room in your budget or an opportunity to tackle outstanding debts more aggressively.

For those benefiting from higher superannuation contributions, consider whether you want to make additional voluntary contributions to maximise the tax benefits and compound growth over time. The combination of higher employer contributions and potential voluntary contributions could significantly boost your retirement savings trajectory.

If you're carrying high-interest debt on credit cards or personal loans, the extra income could be directed toward faster repayment, potentially saving significant amounts in interest charges over time. When comparing your options for debt consolidation or refinancing, factor in your improved income position from these changes.

Making the Most of Your Improved Financial Position

These July 1 changes represent a positive shift for many workers, with higher wages and increased superannuation contributions providing both immediate and long-term financial benefits. However, the mixed nature of some changes – such as the reduced superannuation contribution base – highlights the importance of understanding how these updates specifically affect your situation.

Whether you're looking to optimise your mortgage payments with extra income, compare credit card options to better manage your finances, or explore investment opportunities with your improved cash flow, MoneyMart can help you compare products and find the best deals to match your enhanced financial position.