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Whether you’re starting work for the first time or you’re changing jobs, there are key things to know and do.
- When negotiating pay for the role, pay close attention to the remuneration package.
The more you earn, the easier it will be to save and invest more. So, before you accept the role, ask if they can raise the starting salary. It is unlikely you will get a review within 12 months so you could miss the annual review time, and it may mean waiting much longer than 12 months. If this is not possible, you could try to negotiate an earlier review time. - Be very clear about your salary package. Is super included in the pay quoted to you or is it an addition? This makes a difference to the amount you take home. And if the super rate is changed, you might find it eats into your take-home pay.
- Upon starting, you will be asked for your bank account details and super fund details. It’s a good time to consider your choices.
Is your bank account the best one for you?
Should your pay be deposited into an offset account if you have a mortgage? This is a great strategy to reduce the interest you pay on your mortgage.
If you don’t have an offset account, or a mortgage, consider setting up a special high interest savings account to deposit a percentage of your pay into before you start earning your new salary. This way you will be building your savings without really feeling it.
Where is your super going? If you haven’t had a job before, you might want to find a super fund that is relevant to your industry, is a brand name you are familiar with, or you may have found one on the super comparison sites.
And while we’re on super, should you add a little more into your super from your pre-tax salary? Just make sure you are not going to contribute more than the $30,000* of concessional super you are able to contribute annually.
Check with your employer when they pay your money into your super fund and be vigilant about checking that you are receiving it. In 2023, the ATO estimated there was around $3.4 billion of unpaid super each year – money that employers are not paying their employees.
Don’t jump into big expenses
Remember, most jobs will have a probationary period of typically between three to six months during which time you may be terminated with only a week’s notice. Keep this in mind before signing up to any debt or big ticket purchases during that period.
Kathryn Creasey CFP®, Capital Partners Private Wealth Advisers senior adviser, says the first thing she thinks of when people are starting a new job is to look at superannuation. What is the default fund? Is it suitable? Choosing a super fund is hard, there are so many, and they are so similar, Creasey says.
There are three main things to consider, she says.
- Look at the fees. You don’t want fees to eat away at your balance, but you don’t necessarily want the cheapest if they don’t have features you want – such as online access or being able to choose your own investment mix.
- Do they offer insurance? For some of us, this is the only insurance we’re going to have. If you’re under 25 you might not have dependents but it’s a good time to make sure you have Total Permanent Disability (TPD) insurance which is often packaged with life insurance. TPD covers accidents or illnesses which will prevent you ever working again. Being insured could make a meaningful difference to your life in these situations.
- Are there investment options that suit you? For example, if you want to invest in sustainable options, does your fund offer them?
- Are you able to log in easily and be active? Can you see your balance, change your investment options, update your insurance?
Making your salary last
Salary packing is something else to consider, especially if you are working in a charity or a hospital where there are certain FBT exemptions, Creasy says.
Talk to your accountant, adviser or HR representative if you are in these occupations.
For some people there is an opportunity to pay an amount of pretax earnings into their mortgage. Others may choose to spend on dinners, utilities, and a range of other expenses.
Be sure that you do the research to make sure you understand all the implications, especially with offers such as novated leasing. These obligations can bite over the long run.
Other benefits
Wherever you are working, ensure you make the most of opportunities that are offered. This might include an annual training budget – tap into this to ensure you continue growing your skills – or a mental health day.
*From 1 July 2024, the concessional contributions cap is $30,000. From 1 July 2021 to 30 June 2024, the concessional contributions cap for each year was $27,500.
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