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What is a remuneration increase worth to me in the first year?

The Workplace Bargaining Policy 2018 allows for remuneration increases to be negotiated up to an average of 2.0% per annum (pa). A 2.0% pa wage increase will be worth different amounts to different people.  However, as a simple guide we have used the median[1] base salary from the 2016 APS Remuneration Report.

Table 1: Annual and fortnightly values of a 2% increase across classifications

Classification

Base Salary Median*

$

2.0% increase (annual)*

$

2.0% increase (fortnight)*

$

Graduate

62,493

1,250

47.92

APS 1

47,567

951

36.46

APS 2

54,588

1,092

41.87

APS 3

61,512

1,230

47.16

APS 4

69,239

1,385

53.10

APS 5

74,451

1,489

57.09

APS 6

87,263

1,745

66.90

EL 1

108,796

2,176

83.42

EL 2

135,583

2,712

103.97

*Figures in the table are before tax

What is a 6.0% remuneration increase worth over a three year agreement?

There is an accumulating effect with subsequent wage increases.  Based on the figures provided in Table 1, a 2.0% pa wage increase for three years for an APS 5 is:

Table 2: 6% increase before tax for an APS 5 over a three year agreement

Wage increase

Year 1

Year 2*

Year 3*

Total

2% on commencement

 

$1,489

$1,489

$1,489

$4,467

2% 12 months from commencement

 

 

$1,519

$1,519

$3,038

2% 24 months from commencement

   

$1,549

$1,549

     

Total received over three years**

$9,054

*Year 2 and 3 have a compounding effect

** The final salary for the APS 5 would be $79,008

Based on the figure provided in Table 3, a 2.0% pa wage increase for three years for an EL 1 is:

Table 3: 6.0% increase before tax for an EL 1 over a three year agreement

Wage increase

Year 1

Year 2*

Year 3*

Total

2% on commencement

 

$2,176

$2,176

$2,176

$6,528

2% 12 months from commencement

 

 

$2,219

$2,219

$4,438

2% 24 months from commencement

   

$2,264

$2,264

     

Total received over three years**

$13,230

*Year 2 and 3 have a compounding effect
** The final salary for the EL 1 would be $115,455

What else does a remuneration increase affect?

Depending on your workplace arrangement, remuneration increases also increase salary-related allowances such as fire warden, first aid and harassment contact officer allowances. In most circumstances, salary-related allowances will count for superannuation purposes.

A change in base salary has the greatest flow-on accumulative effect on superannuation contributions.