Australia’s superannuation system is set for major changes from July 2025, bringing new opportunities — and some challenges — for workers, retirees, and employers.
These reforms aim to strengthen retirement savings, promote fairness, and modernize contribution processes. Here’s a full breakdown of what’s happening, what to expect, and how you can prepare.
Key Changes Coming to Superannuation in July 2025
| Policy Change | Details | Who Is Affected |
|---|---|---|
| Superannuation Guarantee (SG) Rate Increase | Rising from 11.5% to 12% | Employees and employers |
| Super Contributions for Paid Parental Leave | Government to pay super during Paid Parental Leave | New parents |
| Higher Tax on Large Balances | 30% tax on earnings over $3 million | High net-worth individuals |
| Transfer Balance Cap (TBC) Increase | Raised from $1.9M to $2M | Retirees |
| Payday Superannuation Introduction (2026) | Super paid with each paycheck | Employees (future impact) |
Detailed Breakdown of the July 2025 Superannuation Changes
1. Superannuation Guarantee (SG) Rate Increase
Starting July 1, 2025, the Superannuation Guarantee (SG) rate will rise from 11.5% to 12%.
This means employers will contribute 12% of an employee’s ordinary time earnings into their nominated super fund.
- Impact: This increase will gradually boost retirement savings over time.
- Note: Some employees on total remuneration contracts might see their base salary adjusted unless employers absorb the extra cost.
2. Superannuation Contributions on Paid Parental Leave
For the first time, super contributions will be made on government-funded Paid Parental Leave (PPL).
- Start date: July 1, 2025.
- Benefit: Helps close the retirement savings gap, especially for women, who are disproportionately affected by career breaks for parenting.
Parents taking PPL can now expect their super to keep growing even while they’re away from work — a major step toward equality in retirement income.
3. Higher Tax for Superannuation Balances Over $3 Million
Australians with super balances exceeding $3 million will face a 30% tax rate on earnings related to the excess balance.
- Current tax: 15% on earnings.
- New rule: Earnings on the portion above $3 million taxed at 30%.
This measure targets only a small percentage of high-balance accounts, ensuring the system remains equitable without affecting the majority of Australians.
4. Increase in the Transfer Balance Cap (TBC)
The Transfer Balance Cap (TBC) — the maximum amount you can transfer into a tax-free retirement income stream — will rise from $1.9 million to $2 million.
- Impact: More people will be able to enjoy greater tax-free income streams in retirement.
- Who benefits: Mainly individuals nearing or entering the retirement phase from July 2025 onward.
5. Payday Superannuation (Effective July 2026)
Although officially rolling out in July 2026, employers need to prepare now for Payday Super.
- Instead of quarterly payments, superannuation will be paid at the same time as wages.
- Benefit: Ensures employees receive their entitlements faster, reduces missed or delayed contributions.
The Superannuation Bonus changes in July 2025 represent some of the biggest shifts to the Australian retirement system in recent years.
For most employees, the increased 12% SG rate and contributions during Paid Parental Leave are significant wins that will boost long-term savings. Meanwhile, those with super balances over $3 million will need to plan carefully due to the higher tax rates.
With careful planning and awareness, Australians can make the most of these changes to maximize their retirement benefits.
Whether you’re nearing retirement or just starting your career, staying informed ensures you’re financially prepared for what’s ahead.
FAQs
Will my take-home pay decrease when the SG rate increases?
If your salary package is “inclusive of superannuation,” the increase in the SG rate may slightly reduce your take-home pay unless your employer decides to absorb the increase separately.
How many people will the new 30% tax rate impact?
It’s estimated that around 80,000 Australians — those with super balances above $3 million — will be affected by the higher earnings tax rate.
Is the Payday Superannuation system starting immediately in 2025?
No, Payday Super will start from July 2026, but employers are encouraged to begin preparations well in advance to ensure compliance.