5 ways women can leverage the gender pay gap to their advantage

As an Australian woman, you receive just 89 cents for every $1 a man earns. That’s according to the Workplace Gender Equality Agency (WGEA), which puts the average gender pay gap at 11.5 per cent as of May 2024.

That gap has other flow-on effects – less pay means less money going into superannuation, less opportunities to invest and build wealth, less income to fund career development, and less financial independence (sometimes trapping women in toxic relationships).

However, there are ways to have this woeful imbalance work to our advantage or at least offset the damage.

1. Pay gap data

Use published pay gap data to renegotiate your pay and conditions with your employer. Or change jobs to an employer with a better track record.

The WGEA Data Explorer site is a great resource for determining the gender pay gap within your industry.

As of this year, individual employers now must provide their data, allowing you to see the current state of play with your employer and how they compare to others.

This visibility over pay rates, and naming and shaming of poor performers, gives you much more bargaining power in performance reviews and job interviews.

2. Career choices

We often choose a career based on personal interest. But it can pay to look at it a different way: work to live, not live to work. That means choosing a career that pays well (and equally), affording you a better lifestyle and more choices later in life.

Some employers and industries now offer lucrative incentives to encourage more women into their ranks, including STEM (science, technology, engineering and maths). There may even be subsidies or free training to help you make such a career change.

Consider too the bigger picture when it comes to looking after children and elderly parents or in-laws. Typically, the woman sacrifices her paid work to take on this role, often because she earns less. However, given women often find it harder to get back to the same or higher level of income when they resume full-time work than men do, you may be better off as a couple longer term by having your partner take the short-term income hit to do unpaid caregiving while you focus on shoring up your income.

3. Targeting investments and spending

Money talks – both as a customer and as an investor. The best way we can collectively send a message to companies to do better is to vote with our feet.

Refocus your spending and investments away from poor-performing companies and towards market leaders in gender equality. When buying from a company or investing in shares, look into things such as how they pay and treat female employees, the proportion of women in their leadership team, and their representation of women in marketing and community initiatives.

For instance, 25 per cent of boards and governing bodies are gender balanced, but 26 per cent have no women at all. I know where I want my money going!

4. Super contributions

Given the gender imbalance in pay and superannuation, women are often the primary beneficiaries of spouse super contributions. Under this rule, the higher-earning partner can make voluntary payments into the other’s super fund – and claim a tax deduction for doing so.

It’s a win-win for couples – your super gets a top-up to compensate for lower earnings, while your partner pays less tax.

Alternatively, you may be eligible for government co-contributions for lower income earners.

5. Tax structures

Speaking of tax, if you earn less than your partner, you should pay less income tax. Use this fact where possible (within the law, of course) to minimise your overall tax as a couple.

That could include having your partner claim more of the deductions (like charitable donations), putting investments solely into your name, or having share/trust dividends paid to you instead of your partner.

Remember, the gender pay gap sucks. But while we collectively push for positive change, you have some power to minimise how it impacts you personally. Be proactive and take a stand – your future self will thank you for it!

Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754.