Why you need to ask for a pay rise now
With the Reserve Bank delivering its 11th interest rate rise in May, and annual inflation sitting at around 7%, workers would be wise to ask for a wage rise from July 1, 2023, as some employers' budgets reset and to avoid a plunge in their real wage.
While the Budget will provide some tax relief for workers, it's important that the real wage of workers be maintained as living costs rise.
Many employers will be willing to pay their staff more in the new financial year to avoid the headache of having to replace them. Australian unemployment is sitting at its lowest level since 1974.
Older workers, or 'baby boomers' are leaving the job market and there simply aren't enough younger workers to replace them; with a new financial year shortly upon us, the time is ripe for asking for a salary increase with the new year coming.
The Budget has confirmed that stage three tax cuts will apply from 2023-34. The Government will abolish the 37% marginal tax bracket completely and lower the 32.5% marginal tax rate to 30%.
The cuts also raise the threshold for the 45% marginal tax rate, meaning everyone earning between $45,000 and $200,000 will pay the same 30% marginal tax rate.
That's good news, but it would be even better for workers to secure a bigger pay packet in 2023-24 with inflation likely to stay elevated through 2023.
1. Ask for a real wage rise
Inflation is going up around 7% p.a., yet wages growth is sitting at around 3.5%. It's only fair that your salary keeps pace with inflation.
Yet nationwide, average wages grew just 3.2% over the 12 months to November 2022, whereas company profits surged 16% over the year to December 2022, data from the Australian Bureau of Statistics reveal. So many employers can afford pay rises. It's only right that you ask for what you think is fair and reasonable in this tight labour market.
2. Be confident about your worth
The more prepared and confident you appear, the more your boss will be prepared to listen to your request for a wage increase. Practise with a friend or colleague who is experienced in management and fine tune your arguments and presenting evidence of your achievements. The more prepared you are, the more likely you'll get a pay rise.
3. Back your request with independent market data
You need to show your employer that you are adding value to the organisation. The more you can prove your value or your output, the greater the chance is that your request for paradise will be granted. You should research comparable salaries being paid for similar roles in the jobs market.
There is ample material online with many organisations regularly publishing salary surveys. If you work in a professional role, you should also speak to a recruitment consultant about your worth in the jobs market. If you're being paid less than the market, that's powerful evidence to present when asking for a pay rise.
4. Set up a private meeting
Ask your boss for a private meeting to discuss your salary, rather than bringing it up out of the blue or at an unrelated meeting.
You should ask for a pay rise in person not over email. It will be much easier for your boss to say no if you aren't in front of them. If you can't do it in person, a video call is better than a phone call or email. One you're at the meeting, stress your loyalty, as well as your value.
5. If you don't get cash, ask for other perks
If your boss says no to your request for a salary increase, ask if there is another way they could recognise your value, such as such as professional training courses, extra paid leave, assistance with tertiary education, gym memberships, help with childcare or time off in lieu.
Having some of these extras could lead to much greater job satisfaction, as well as help to alleviate the pressure on your wallet and household budget.
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