Upcoming Superannuation Changes from 1 July 2025: What Australian Businesses Need to Know

Announced by the Federal Government and administered through the ATO and APRA, these updates will affect employers, employees, and individuals with large superannuation balances.

Understanding the changes now will help your business stay compliant and support employees through a smooth transition.

What’s Changing on 1 July 2025?

1. Superannuation Guarantee (SG) rate increase

The SG rate will rise from 11.5% to 12%, applying to all ordinary time earnings paid on or after 1 July 2025, regardless of when the work was performed.
This is the final legislated step in the government’s plan to gradually increase the SG rate to help Australians build their retirement savings.

2. Increase to the general transfer balance cap

The general transfer balance cap—the limit on the total amount that can be transferred into the retirement phase of superannuation—will increase from $1.9 million to $2 million.

3. Proposed new tax for balances over $3 million

The government is considering a new 15% tax on earnings attributable to the portion of a person’s super balance that exceeds $3 million.

• Currently, super fund earnings are taxed at 15%, and earnings in retirement phase accounts are tax-free.
• The proposed tax would apply an additional 15% to earnings on the portion above the $3 million threshold.
• This proposal only affects individuals with super balances over $3 million.
• If passed, the tax could be backdated to 1 July 2025, though legislation has not yet been enacted.

Parliament is not due to sit again until 22 July 2025, so the final details remain uncertain. Individuals potentially affected should stay in touch with their advisers.

How Businesses Can Prepare

With 1 July fast approaching, here are key steps businesses should take:

✅ Update payroll systems

Ensure your payroll software is updated to apply the new 12% SG rate correctly.

✅ Inform and train internal teams

Brief HR, payroll, and finance teams on the upcoming changes to minimise processing errors and support clear communication with staff.

✅ Communicate with employees

Let your team know about the SG increase and what it means for them. For high-income earners who may be affected by the $3 million super cap proposal, encourage them to seek financial advice.

✅ Budget for increased costs

The SG increase will raise your payroll expenses. Review your budgets and forecasts now to accommodate the change.

This may also be a good opportunity to review your broader remuneration and benefits strategy.

Final Thoughts

These changes reinforce the importance of staying informed and proactive when it comes to superannuation. Whether it’s updating payroll systems or helping employees navigate complex reforms, preparation will be key.

If you’d like guidance on how these changes may affect your business or your team, speak to your accountant or adviser sooner rather than later