Relief for salon owners as government delays super raise

While a raise in the mandatory employer contributions to superannuation was set to take hold next year, the federal government has announced it will delay making this decision, given the fallout of the global pandemic, given business owners will likely struggle to increase the payments, given the financial hardships of 2020.

The superannuation guarantee is scheduled to increase from 9.5% to 10% in July 2021, before further increasing to 12% by 2025, but Prime Minister Scott Morrison has said he will not make a call on this until May 2021.

While increased superannuation payments would lead to a more comfortable retirement for workers, the immediate implications could be dire for the salon owners forced to make the payments, as well as the current livelihoods of their employees.

Council of Small Business Organisations Australia CEO Peter Strong says increasing the super guarantee now “is not a win” for workers given the effect higher super payments will have on small businesses, including salons.

“It’s the employees that will pay for this. Wages won’t see a decrease, what they’ll see is less hours and less jobs. It’s not a win for the workers,” Mr Strong said.

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