How three super changes could transform members’ future

The recent rise of the super guarantee to 12%, the announcement of Payday Super and expanding the scope of the Low Income Super Tax Offset will have long lasting positive effects for all Australian workers.

12% super guarantee

Since 2013, the super guarantee rate has risen gradually from 9%, hitting 12% from 1 July 2025: a change HESTA pushed for to improve retirement outcomes.

As a result, people starting their careers in 2025 could be hundreds of thousands of dollars better off in retirement, new modelling commissioned by HESTA has shown.

The new modelling focused on women, who make up nearly 80% of our more than one million members. It showed the average HESTA member is projected to retire with $712,000¹ if they earn the new higher rate of super for their entire working lives – a $411,000 boost compared to women modelled to retire this year.² See the modelling scenarios at the bottom of this page.

We know our members’ balances are impacted by part-time work and time out of the workforce to provide unpaid care, and the modelling accounts for those considerations.

With many HESTA members working in typically lower-paid industries such as aged care and early childhood education, the higher super rate could be a game changer.

Payday Super

Currently, employers can choose to pay super contributions to employees each quarter at a minimum. The proposed Payday Super rules will require them to pay super contributions within seven business days of paying their employees’ wages, starting from 1 July 2026.

Why is this changing?

The Federal Government’s Payday Super law aims to create a fairer super system for all Australians.

Employers will be able to streamline payroll processes, reduce large quarterly liabilities, improve cash flow management and make it simpler to meet super obligations. The change is a win for workers in lower-paid, casual and insecure jobs who are more likely to miss out when super is paid less often.

The change will also help stamp out unpaid super which disproportionately impacts women and has been estimated to cost working Australians $5.7 billion a year.³

Making super tax concessions fairer for lower income earners

HESTA has been calling for super tax to be made fairer for lower-income earners. So we’re thrilled to welcome the Federal Government’s recent announcement that from 1 July 2027, the Low-Income Super Tax Offset (LISTO) will extend to people earning up to $45,000 (or the top of the second income tax bracket, as it was originally intended to do). The LISTO payment will also rise be lifted so that it matches with the current mandatory super payment level of 12%, increasing the maximum payment from $500 to $810.

These important changes will help ensure no working Australian is paying more tax on their super contributions than on their take-home pay.

Find out more here.

Impact of the 12% super guarantee – modelling scenarios

Modelling prepared by HESTA and partner Laneway Analytics is not a prediction, is for illustrative purposes only and as such the outcome cannot be guaranteed and may be different. The modelling made assumptions including: Begin career at age 18; Retirement age 67; AWOTE: 3.7% pa; CPI 3.7% pa; Investment return net of investment fees and taxes CPI +3% pa; 18-year-old HESTA member account balance $1500; 18-year old HESTA member total contribution $1543 for first year of work, then contributions made annually thereafter based on HESTA’s assumptions around salary progression; Default insurance cover (premiums CPI-adjusted); Accumulation fixed fee $52 pa (non-indexed); Accumulation variable fee 0.15% pa (non-indexed); Full-time work at ages 18 to 30, 44 to 67; 26 weeks of super on Paid Parental Leave at ages 31 and 33; Part-time work (0.6 FTE) at ages 34 to 43; No other retirement savings.

¹ Estimated retirement amount (ERA) for a typical HESTA member who will start their career on 1 July 2025 and retires on 30 June 2074, earning 12% super for their full career.

² Compared to the ERA for a typical HESTA member who started their career on 1 July 1976 and will retire on 30 June 2025, earning 3% super starting 1992 and taking account of historical super guarantee increases.

³ “Payday super laws a long time coming: let’s get it done” https://smcaustralia.com/news/payday-super-laws-a-long-time-coming-lets-get-it-done/ (15/10/25)