Australia’s superannuation landscape is on the move, with significant reforms on the horizon. Over the next two years, employers and employees alike will need to navigate key changes affecting contributions, tax obligations, and compliance. Here’s what you should know.
The super guarantee is rising to 12%
From 1 July 2025, the super guarantee (SG) rate will rise from 11.5% to 12%, increasing employers’ super contributions. While this supports long-term retirement outcomes, it also impacts business cash flow and payroll processes. Employers should review their budgeting, payroll software, and employment contracts to ensure they can accommodate the higher SG rate. For employees, this change means a boost to retirement savings, but it may also influence salary packaging discussions if total remuneration is fixed. Reviewing your contribution strategies now can help you maximise future outcomes.Payday super starting 1 July 2026
A major compliance shift is coming with the introduction of payday super from 1 July 2026. Employers will be required to pay super contributions at the same time as salary and wages, rather than quarterly. This aims to improve employee retirement balances by reducing unpaid or delayed contributions. Employers should start preparing early by upgrading payroll systems and processes to handle more frequent payments. Transitioning smoothly will help avoid compliance penalties and build employee trust. Tip: Check with your payroll provider about system updates to support payday super.Proposed tax changes for super balances over $3 million
A proposed change currently under discussion could see individuals with total superannuation balances exceeding $3 million face an additional tax of up to 15% on earnings related to the portion exceeding that threshold. If legislated, this measure would take effect from 1 July 2025 and aims to improve equity in the system. High-net-worth individuals might want to review their fund strategies in preparation. It may be wise to seek advice on potential restructuring, such as:- Diversifying outside of super to manage taxable growth.
- Reviewing insurance policies held within super.
- Engaging a qualified adviser can help you plan for the best after-tax outcomes.
Super on paid parental leave
The Federal Government has confirmed it will introduce superannuation contributions on paid parental leave from 1 July 2025. This move recognises the importance of supporting women and parents who take time away from work, helping reduce the retirement gender gap over time. Employers will need to plan for these contributions in their budgeting and payroll processes. Employees should consider how this extra boost could influence their retirement balances and insurance cover inside super.What you should do next
Whether you’re an employer or an employee, these super changes will affect you. Here’s a practical checklist:- Employers: Review payroll systems, update budgets, and ensure compliance processes are ready.
- Employees: Revisit your contribution strategy and retirement planning, particularly if you have a large balance.