The mininum wage increase doesn’t just affect award-level employees. Over time, it tends to lift the expectations and wage benchmarks across the board. What starts at entry-level often trickles up.
Add to that the rising cost of living — with CPI (Consumer Price Index) continuing to edge higher — and you’ll likely see staff seeking pay increases just to maintain their standard of living. The pressure is real, especially in industries where it’s already tough to attract and retain good people.
And then there’s super.
The jump from 11.5% to 12% might seem small in isolation, but across a team of staff — particularly full-time or salaried employees — it adds up fast.
If your pricing hasn’t shifted in line with your increasing wage and on-cost obligations, you’re absorbing the difference. That means reduced profit, and for some businesses, operating at a loss.
What You Can’t Do: Ignore It
Here’s where we see many business owners go wrong — they try to absorb the increases instead of adjusting their pricing. But you can only squeeze margins so far before the business starts to suffer.
If your charge-out rates haven’t moved in 12–18 months, it’s likely time for a review. Consider:
- Has your cost to deliver gone up?
- Are you still paying yourself appropriately?
- Can you sustainably cover leave entitlements, super, and tax obligations?
If the answer is “no” — then it’s time to act.
What You Can Do: Plan, Price & Communicate
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Review your pricing model
Run the numbers. Factor in the new wage and super rates. Revisit how you calculate your charge-out rates — especially if you use a cost-plus model.
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Be transparent
If you need to pass on a price increase to your clients, don’t shy away from it. Most people understand the need to adapt pricing in line with rising operating costs — especially if you continue to deliver quality and reliability.
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Build it into your systems
Wage and super increases happen every year. Get ahead of it. Schedule an annual review of your pricing and payroll obligations — ideally before 30 June each year — so you’re not left scrambling.
Don’t Forget Your Own Pay
One of the most common traps we see? Business owners underpaying themselves in order to cover rising staff costs. If you’re working 60+ hour weeks, wearing five hats, and still not taking home a decent wage — your pricing is broken. Full stop.
Final Thought: Keep It Commercial
Your business is there to serve your clients — but it also needs to serve you. That means pricing that reflects your value, covers your costs, and leaves room for growth. As the economy shifts, so should your strategy.
Now is the time to take stock, make adjustments and get super clear on your pricing strategy.
If you need support getting it done, contact Lift Accounting & Advisory today and move into the new financial year with confidence.
