Australia’s superannuation system is undergoing significant changes starting from July 2025 and is set to improve fairness, increase retirement savings and enhance equity and sustainability.
- Employer Super Contributions Rise to 12%
*From 1 July 2025, the Superannuation Guarantee rate will increase from 11.5% to 12%. This is part of a long-term plan to help workers build more robust retirement savings.
- New Super Tax for High Balances (Division 296 Tax)
*Starting 1 July 2025, a new 15% tax (on top of the existing 15%) will apply to earnings from superannuation balances over $3 million, meaning affected individuals could face a total tax rate of 30% on earnings above this threshold. This reform includes unrealised capital gains which means taxes could be increases on asset values, even if you haven’t sold the asset. Some see this as unfair and possibly problematic for self-managed super funds that do not hold liquid assets.
- Employer Super Contributions Rise to 12%
*From 1 July 2025, the Superannuation Guarantee rate will increase from 11.5% to 12%. This is part of a long-term plan to help workers build more robust retirement savings.
- Superannuation Added to Paid Parental Leave
For the first time, from 1 July 2025, superannuation contributions will be included in government-funded Paid Parental Leave. Payments will be made directly to super accounts starting July 2026.
- Payday Super Becomes Mandatory (from 2026)
From 1 July 2026, employers will be required to pay super contributions at the same time as wages, not quarterly, with the reform being designed to improve compliance and ensure workers receive full entitlements.
- Transfer Balance Cap Increases to $2 Million
The general transfer balance cap, which limits how much can be moved into a tax-free retirement account, will increase from $1.9 million to $2 million on 1 July 2025.
These changes mark a pivotal shift, whether you’re an employer, a high-net-worth individual, or someone planning parental leave, stay informed and seek professional advice to safeguard and adapt your financial retirement planning strategy.
Employers and Employees
- Policy Updates: Review and update employment contracts, workplace policies, and procedures to align with the new laws.
- Training: Implement training programs to educate management and staff about their rights and responsibilities under the new legislation.
- Compliance Checks: Conduct audits to ensure compliance with wage payment obligations, superannuation contributions, and other legal requirements.
- Communication: Clearly communicate changes to employees, including their rights under the new laws and any updates to company policies.
Sources & Further Reading:
- Treasury Superannuation Reforms Overview: Superannuation Reforms
- ATO Superannuation Changes Industry Roadmap: Superannuation Changes Industry Roadmap
Disclaimer: This document is provided for general informational purposes only and does not constitute legal or professional advice. While every effort has been made to ensure the accuracy of the information contained herein, the author accepts no liability for any changes, or loss, or damage arising from reliance on its content. Readers should seek independent legal advice and updates, before acting on any matter discussed in this document.