Superannuation Guarantee: What’s New In 2025?

Superannuation Guarantee: What’s New In 2025?

Written by: Corey Haynes | Accounting Team

 

A lot of people ask the question:

“What is the best first step to plan for retirement?”

And most people’s first answer would be to look towards their superannuation.  If your superannuation is super, then your retirement will be equally super.

Superannuation is one of the most important aspects of retirement planning in Australia. It’s a retirement lifeline you build throughout your working career.  Whether it’s your business that needs to organise its payroll, or you are planning for the future, keeping up to date with the latest changes to superannuation is vital, and here at Canny Group, our goal is to offer super updates!

The biggest element of the Superannuation Guarantee, or SG for short, is legislated as the minimum percentage of an employee’s ordinary time earnings, or their wage for short, that must be paid into their super fund.  Since Super was introduced in 1992, it started at just 3% and has climbed to 11.5% (last year).  Super has become so vital to our retirement that the government, in just over 30 years, has raised the percentage of super by 8.5% with another increase to come.  If you’re not sure what the superannuation guarantee is, it’s all explained below!

But that isn’t the only change coming, with changes to contribution caps, new rules to paid parental leave, and updates for higher balances for accounts, now is the perfect time for us to break down the changes in place as of July 1 2025, what they mean for both employers and employees, what you can do to stay ahead along with some extra and proposed future changes that can allow you to plan in a super way.

What Is the Superannuation Guarantee?

Before we dive into the changes, we should probably first look at what the superannuation guarantee is, especially for those new to the workforce or new to Australia.  SG is a compulsory payment made by employers into an employee’s superannuation fund or account.  It is calculated at a base percentage based on an employee’s ordinary wage.  If you earn an allowance from your employer, such as travel, superannuation is not paid on those.  The rate of superannuation guarantee for the 2024 – 2025 financial year was 11%.

Superannuation is currently required to be paid quarterly on the 28th of every month following the end of a quarter, e.g. 18th of July for the April to June period.  If you or your employer does not make this required payment, a superannuation guarantee charge or SGC for short, is required to be lodged to the Australian Taxation Office (ATO), which includes interest and admin fees, neither of which is tax deductible, so don’t be late!

Speaking of the ATO, if you want to be across everything they’ve got going on this Tax Time, check out this previous article we put together:  ATO Tax Time Targets for 2025

Superannuation Guarantee Changes From 1 July 2025

Now that we have broken down what superannuation is and its importance to your retirement, let’s break down the changes as of 1 July 2025 and some future proposed changes to get you ready:

1. Superannuation Increase to 12%:  Firstly, the final change in the ATO’s superannuation increase scheme has reached its final point, going from 11.5% to 12%, where it is due to stay for the foreseeable future;
2. Maximum Contribution Base (MCB) Adjustments:  The MCB is the maximum income an individual can earn and have superannuation calculated on for a quarter, and details the maximum superannuation that can be paid in a quarter.  In the 2024 – 2025 financial year, the maximum quarterly income was $65,070, and the maximum quarterly superannuation was $7,483.05.  This has been adjusted, so as of 1 July 2025, the maximum quarterly income an individual can have superannuation calculated on will decrease to $62,500; however, the maximum superannuation that can be paid to an individual in 1 quarter is rising to $7,500.  This means you don’t have to work as hard or be paid as much ordinary wages to receive a higher superannuation amount in a quarter;
3. Superannuation Paid On Parental leave:  This next change is a huge game-changer and will allow parents to feel more comfortable in knowing their retirement isn’t going to be impacted by having children.  From 1 July 2025, for the first time ever, there will be superannuation paid on government-funded paid parental leave.  Don’t worry, you don’t need to do anything; there are no forms required.  Anyone who received paid parental leave in the 2025 – 2026 financial year will receive 12% superannuation of their paid parental leave, which will be processed by the ATO on 1 July 2026.  It won’t cost an employer anything, and it means you can feel more secure in knowing your retirement is safe;
4. The Transfer Balance Cap Increase:  The transfer balance cap, or TBC for short, is a limit on how much you can transfer into a tax-free retirement income stream.  The cap is rising from $1.9 million to $2 million.  This allows retirees to enjoy more of their superannuation tax-free;
5. The Total Super Balance Threshold Increase:  This is the Super balance threshold that you can be at, which makes you eligible for certain non-concessional contributions, use of the “bring forward rule” which allows unused superannuation contributions from prior financial years into the current financial year, and makes you eligible for government co-contributions or spouse contributions.  The threshold was $1.9 million, but this is now going up to $2 million;
6. Unused Concessional Contributions Expiry:  If you have any unused concessional contributions from the 2019 – 2020 financial year, they will have expired as of 30 June 2025, meaning you can only bring forward unused concessional contributions from the 2020-2021 financial year onwards;
7. Division 296 Superannuation Tax:  This next change, whilst not in place yet, has been proposed and should be kept in mind as it could take effect as of 1 July 2025.  There is a proposed extra 15% tax for individuals who have a balance of $3 million or more in superannuation.  Currently, an individual is taxed at 15% on their contributions; this would mean that those with over $3 million could be taxed at a total of 30% on their contributions; and finally
8. Payday Super Scheme:  It is worth noting that there is a proposed change to the superannuation payment due dates that could take effect as of 1 July 2026.  This is called ‘payday super’.  What this proposal means is that employers will be required to make superannuation payments within 7 days of wages being paid.  Note that the 7 days is the timeframe the Superfund needs to receive it, meaning that employers should account for around three business days of processing, so it is best to pay it at the same time as your wages.  Alongside this change, the need to lodge SGC statements (mentioned previously) will no longer be required, as these will be calculated automatically by the ATO.  So, even though this won’t come into effect until 1 July 2026, if it comes into effect at all, it is important to start planning for it, so you aren’t caught off guard.

Superannuation Balances + Differences in Growth

While it may not feel like a lot, a 0.5% increase in your superannuation can be huge.  Let’s say you are earning $90,000 at the age of 30, and you are looking to retire at 67 years old.  At 11.5% super, you would be receiving $10,350 of Super per year, which over the 37 years until retirement is a total amount of $382,950.00.  Now, let’s bring this up to the 12% increase, the total super per year becomes $10,800, which is $450 extra each year and over the 37 years, that becomes an extra $16,650 per year!  That is almost as high as the minimum income threshold the government sets out to start paying PAYGW!

This doesn’t even account for paid parental leave. If you took paid parental leave for, say, three months, you’d receive no super contributions.  Now that you take time to spend with your family and baby doesn’t impact your retirement as you continue to receive Super contributions.

And the increase in the transfer balance caps and Super balance threshold to $2 million and the increase in Super contributions per quarter, make this new financial year the perfect time to increase your retirement planning.

Looking to understand how your superannuation sets you up for retirement?  Or maybe you want to know exactly what balance you need?  Check out this previous blog we put together:  How Much Superannuation Do I Need For Retirement?

Key Dates For Superannuation Contributions + Super Guarantee

The key dates that employers need to be aware of to avoid penalties are as follows:

• 28 July:  April – June quarter.
• 28 October:  July – September quarter.
• 28 January:  October – December quarter.
• 28 April:  January – March quarter.

However, it is important to note that there is a possibility of these dates changing as of 1 July 2026 to the same day as wage processing dates.

Superannuation before 1 July 2022 was only required for workers whose ordinary wages were less than $450 per month.  However, after 1 July 2022, that changes, so every employer is required to pay superannuation on any amount of wage payment (excluding certain allowances), no matter how small.

The exception is if an employee is under 18, then SG only needs to be paid when they work more than 30 hours in one week.

What Do These Changes Mean For Employers + Employees?

Employers:

• Make sure your payroll systems reflect the 12% SG rate and the reduced maximum contributions base.
• Stay on top of quarterly contribution due dates and start preparing for the same-day Super potentially coming in 2026.
• Keep an eye out for the proposed 15% tax increase on $3 million balances.

Employees:

• Expect to see higher superannuation contributions from your employers from 1 July 2025.
• Expect superannuation contributions to be paid on your paid parental leave occurring on 1 July 2026 and every 1 July following a financial year.
• If you are a high-income earner, you may be looking at extra taxes – chat with Canny’s Financial Advisors today!
• Be aware that any of your unused concessional contributions from 2019 to 2020 will now have expired.
• And generally, review your super fund’s performance, fees and insurance to make sure you are ready for tax time.

Canny Accounting For Understanding Tax Law + Superannuation

Whether it’s the increase in super percentage, the change in thresholds or understanding proposed tax increases, it is never too early to start planning for retirement or getting advice for the running of your business.

Here at Canny Group, our accounting and financial advising teams are ready to help you, business or individual, stay compliant, grow your wealth and build for a super retirement.  From payroll to tax advice to retirement planning, let us provide a Super service to you, so that your super works harder than ever before.

Get in touch to speak with one of our team to understand and comply with all tax laws!