Super Guarantee Rate is Set to Rise from July – Are You Prepared?
The superannuation guarantee statutory rate has remained at 9.5% since July 2014. However, plans have been in place for some years now, to increase the rate to 12% incrementally.
In July 2021, the rate will rise to 10%. From then on, the rate will increase by 0.5% each year until July 2025 when it will reach the legislated 12%.
Prior to the delayed 2020 federal budget, there was discussion about the possibility of deferring the rate rise because of COVID-19. However, the rate rise had been postponed from 2018 to 2021, so the plans to start increasing the rate each year remain in place – at least for now.
Prepare Now for the July Rate Rise
Review your current superannuation costs for all employees, both hourly and salaried.
Review any salary packaging arrangements. Is the agreement inclusive of superannuation or is super paid on top of the agreed salary?
For salary packages inclusive of super, you will need to check the contract’s wording to make sure you apply the changes correctly. This change may also impact annualised salary arrangements.
Calculate your revised payroll costs from July, showing the current wages and superannuation expense compared to the new rate from July 2021. Highlight the increased amount per month or quarter, so you know precisely what the impact will be.
Discuss the super rate increase with your employees now. Let them know that this is the first year since 2014 that the rate has risen and that unless the law changes, there will be an increase of 0.5% each year from now until July 2025 when the statutory rate will reach 12%.
Remember – short payment or late payment of super can incur hefty penalties – plan now for higher payroll expenses from July, so you don’t get caught short.
If you’d like help reviewing payroll costs and employee agreements, talk to us now, and we’ll make sure you have accurate reports to make planning for the rate rise easy. Getting organised now means that you’ll be well prepared for your business’s increased costs when the first payment is due later this year.
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Why do customers buy from you? Knowing what it is that makes someone choose your products and/or service over your closest competitor is critical business information.
Understanding this ‘competitive advantage’ is an important part of making your business stand out in the marketplace. Establishing your competitive advantage will help you create a compelling marketing message and will build value in your business – and this can all be wrapped up in your brand messaging, marketing and sales activity.
But how do you define what your key advantages are?
Key ways to understand your competitive advantage
Your competitive advantage could be something tangible, like a unique feature that your competitors simply don’t have. But, equally, it doesn’t have to be a feature at all – it might be your brand positioning or your customer service that sets you apart.
To drill down into the fundamental elements of your competitiveness, you need to ask some important questions about the nature of your products/services, so you know precisely why your brand appeals to your core customer base.
For example, ask yourself:
Were you first into the market? – If you’ve been a true innovator in your sector, you may have been the very first company into your current market. Whether that’s a new kind of software app, or a unique piece of farming equipment, you need to protect this position and ensure you stay the dominant player in your new niche.
Could your product/service be copied? – If you hold a unique position in your market, it’s crucial that your product/service can’t be copied and rolled out to undermine your position. As such, you need to protect your intellectual property (IP) and file patents and copyrights for all the relevant IP that gives you your competitive advantage.
Are you niche specialists? – Your competitive advantage may be that you offer a truly niche specialism, where there aren’t many competitors in this particular market. To protect this dominance, it’s important to maintain your high-quality service, to work closely with your customers and to remain at the cutting edge of the specialism.
Can you differentiate your product/service? – Does your product stand out from other similar products offered by your competitors? The more unique you can make your offering, the more likely it is that your brand will be the one that people turn to. You can differentiate by features, price, customer service etc. to make sure you’re the stand-out option for customers in this market.
Do you offer greater value? – Any transaction aims to bring value to your end customer. But are you able to deliver a better service or offer more value than your competitors? This may mean offering added value that can’t be matched by other companies; for example, your brand being more local, more sustainably sourced, faster to be delivered, or coming with better customer support.
Do you offer a better price point? – Price can be a real differentiator, so you need to constantly be aware of how your prices compare to those of your competitors. Is your product cheaper than others? Or are you pitching your price at the top end of the market? The more competitive your price point is, and the more it’s linked to your unique value, the easier it will be to carve out a competitive advantage.
Is there stable demand for your product/service? – do people need your specific product and what’s the size of the demand? Do you have a strong network amongst your customer base, or is a competitor gradually winning market share and undermining your supremacy as the market leader? This needs to be regularly reviewed and assessed.
Is your product/service easy to buy? – The way you distribute your product or service can have a big impact on your market position. How quickly and efficiently can you deliver your offering to your customer? And do you have exclusive rights to a distribution channel that makes it easier for your customers to buy from you?
Does your brand have wider appeal? Do your customers identify with your brand in a profound way, and do you have ‘fanboys/fangirls’ who are advocates for your products? It could be that your company philosophy, your values and the way you interact with your customers all offer something unique that draws in customers and makes them stick with your brand – and, if so, there’s a need to measure and retain this brand value.
Talk to us about defining your competitive advantage