superannuation changes: 1 July 2025

From 1 July 2025, a range of superannuation changes are set to take effect. Here’s what’s changing and how it may impact your people.

Super Guarantee rate increasing

From 1 July, the minimum Superannuation Guarantee (SG) rate employers must contribute to their employees’ superannuation each year will rise from 11.5% to 12% of their ordinary time earnings. It’s important to ensure your payroll systems are updated to reflect this increase. Learn more about paying super contributions.

Contribution caps remain unchanged

For the 2025-26 financial year, the amount employees can contribute to their super each year without incurring a higher tax rate (contributions caps) will remain the same. The concessional (before-tax) contributions cap will stay at $30,000 per financial year, and the non-concessional (after-tax) contributions cap will remain at $120,000 per financial year.

Keep in mind, employees who haven't fully used their before-tax contributions cap in the past five financial years may be able to contribute more than $30,000 this financial year, by carrying forward those unused amounts - provided their total super balance was under $500,000 in the last 2024-25 financial year. Employees can check their unused contribution cap amounts via their myGov account or the ATO website.

Transfer balance cap set to rise

Effective 1 July 2025, the general transfer balance cap will increase to $2 million. This cap limits the total superannuation an individual can transfer into the retirement phase for a tax-effective income stream. While this primarily affects employees nearing retirement, it’s a change to be aware of for any potential employee enquiries.

Total super balance thresholds

As the general transfer balance cap increases, the total super balance (TSB) thresholds that determine an employee's eligibility to make non-concessional (after-tax) contributions are also changing. These new TSB thresholds will also dictate the maximum amount employees can contribute after tax and if they can use the bring-forward rule. Learn more about the 2025-26 financial year TSB thresholds on the ATO website.

Superannuation on government-funded Paid Parental Leave

Following years of advocating, we’re pleased to finally see the commencement of super contributions for parents receiving the government’s Paid Parental Leave (PPL) scheme for children born or adopted on or after 1 July 2025. The ATO will make these payments, based on the superannuation guarantee rate, with direct deposits made into employees' super funds starting from July 2026, after the end of the relevant financial year. Learn more at ato.gov.au.

Increase to the untaxed plan cap amount

For employees who may receive super lump sums that includes untaxed money, the limit on how much of that untaxed portion can be taxed at a lower super rate is increasing to $1.865 million from 1 July 2025. Any untaxed amount above this limit will be taxed at the employee's full income tax rate.

Proposed tax changes for higher balances

A potential future change under consideration by the government involves increasing the tax rate on earnings within superannuation accounts with balances exceeding $3 million to 30%. Currently, these earnings are generally taxed at 15%. 

However, this measure is still undergoing parliamentary processes and its implementation by 1 July 2025 remains uncertain.

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