Two ways to quote the same job
Australian job ads and contracts quote pay in two ways. A base salary 'plus super' means super is paid on top. A total package, total remuneration or 'TRP' figure includes super and sometimes other benefits.
The difference is significant. $120,000 plus super is a package of $134,400. A $120,000 package including super is a base salary of about $107,143.
Converting a package to a base salary
Divide the package by 1 plus the super rate. At 12%, base salary = package ÷ 1.12. For a $120,000 package that is $107,143 in salary and $12,857 in super.
Income tax is calculated on the base salary, not the package.
Converting a base salary to a package
Multiply the base salary by 1 plus the super rate. $100,000 × 1.12 = $112,000.
What else can be in a package
Ask what the package figure includes. It may contain:
- bonuses or commissions that are 'at target' rather than guaranteed;
- allowances for a car, phone or tools;
- the value of a company vehicle or other fringe benefits;
- share or option grants that vest over time.
When the super rate changes
If you are on a fixed package including super and the super guarantee rate rises, your employer can meet the increase from within the package, which reduces your take-home pay unless the package is also increased. If you are on base plus super, your salary is unaffected and the extra super is paid on top.