Staying on Top of Super Changes
Australia's superannuation system is regularly updated through legislation, ATO rulings, and government policy. Keeping up with these changes is important — they can affect how much you contribute, how your fund is taxed, and when and how you can access your retirement savings. Here's a rundown of the key changes taking effect in or around 2025.
Superannuation Guarantee Rate Increase
The Superannuation Guarantee (SG) rate has been rising incrementally under legislation passed in prior years. In 2024–25, the rate is 11.5%, and it is legislated to increase to 12% from 1 July 2025. This means employers will be required to pay more into workers' super, boosting retirement savings for all employees.
If you're an employer, now is the time to ensure your payroll systems are updated to reflect this change.
Concessional and Non-Concessional Contribution Caps
The ATO adjusts contribution caps periodically in line with the Average Weekly Ordinary Time Earnings (AWOTE) index. For 2024–25:
- Concessional (pre-tax) contributions cap: $30,000 per year
- Non-concessional (after-tax) contributions cap: $120,000 per year
- Bring-forward rule: Eligible members under 75 may contribute up to $360,000 over three years using the bring-forward arrangement.
Check the ATO website for any cap changes taking effect from 1 July 2025, as these may be revised based on indexation.
The Proposed Tax on Super Balances Over $3 Million
One of the most talked-about policy proposals is the Federal Government's plan to increase the tax on earnings within super for balances exceeding $3 million. Under this proposal (subject to legislation passing), earnings attributable to balances above the $3 million threshold would be taxed at 30% rather than the standard 15%.
This change, if enacted, would affect a relatively small number of Australians but has generated significant debate — particularly around the inclusion of unrealised capital gains in the calculation of earnings.
Payday Super: A Major Reform Coming in 2026
The Federal Government has announced that from 1 July 2026, employers will be required to pay super at the same time as wages — known as "Payday Super". Currently, employers pay super quarterly. This reform will:
- Ensure workers receive their super entitlements more promptly.
- Make it easier to detect and pursue unpaid super.
- Benefit members through more frequent compounding of investment returns.
Employers should begin planning for this change now, as it will require adjustments to payroll systems and cash flow management.
Transfer Balance Cap
The Transfer Balance Cap (TBC) limits how much you can move into a tax-free retirement phase account. The general TBC for 2024–25 is $1.9 million. This cap is indexed to the CPI and may increase in future years. If you're approaching retirement, understanding your personal TBC is critical to tax-efficient income planning.
What Should You Do Now?
- Review your contribution strategy to take full advantage of current caps before 30 June.
- If your balance is approaching $3 million, seek advice on the implications of the proposed tax changes.
- Employers should begin reviewing payroll systems for the Payday Super transition.
- Check your super fund's website or speak to an adviser to understand how these changes apply to you personally.
Super legislation evolves regularly. Staying informed ensures you can take full advantage of the system's benefits while remaining compliant with your obligations.