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Starting 1 July 2025, several important changes will take effect regarding superannuation in Australia, particularly the Superannuation Guarantee (SG):
Super Guarantee Rate Increase
The Super Guarantee rate will increase from 11.5% to 12% of an employeeโs ordinary time earnings
This is the final step in a series of annual 0.5% increases that began in 2021.
What This Means for Employers
- Employers must ensure they update their payroll systems to reflect the new 12% SG rate.
- Contributions must be made at least quarterly to avoid the Super Guarantee Charge (SGC).
What This Means for Employees
- Employees will receive higher super contributions, which can significantly boost retirement savings over time.
- If you're making salary sacrifice contributions, be mindful of the concessional contributions cap (which is not increasing). Exceeding it could result in additional tax liabilities
Other Related Superannuation Changes on 1 July 2025
- Transfer Balance Cap will increase from $1.9 million to $2 million, allowing more to be held in a tax-free retirement phase.
- Division 296 Tax may apply to individuals with super balances over $3 million, introducing an additional tax on earnings above that threshold.
- Government Co-Contribution thresholds may also be adjusted to support low-income earners
If you have any questions please feel free to reach out to a financial adviser.
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