From 1 July 2025, the superannuation guarantee (SG) rate officially rose to 12% of ordinary time earnings (OTE). This is the final step in the gradual increase legislated under previous reforms.
The superannuation guarantee rate will increase from 11.15% to 12%, effective 1 July 2025.
This increase affects cash flow, payroll accruals and employment contracts, especially where total remuneration includes superannuation.
1. Update payroll software: ensure systems are calculating 12% SG correctly from 1 July 2025 pay runs
2. Review employment agreements: if contracts are set to inclusive of super, the take-home pay of employees may reduce unless renegotiated or the employer decides to bear the cost of the increased SG rate
3. Budget for higher super contributions: consider possible cash flow impacts
Remember that significant penalties can be imposed for late or incorrect SG payments, including loss of deductions, interest and other administration charges.
The annual concessional contribution cap will remain at $30,000 for the 2025/2026 financial year. The annual non-concessional contribution (NCC) cap is set at four times the concessional contribution cap meaning it will also remain at $120,000.
Although the annual NCC cap has not changed, NCCs can now be made by individuals with a total super balance (TSB) of less than $2,000,000 on 30 June 2025 (assuming they have not reached the age 75 deadline and any prior bring forward periods are considered). This is due to the fact that the upper TSB limit links to the general transfer balance cap (TBC) which has increased to $2,000,000.
The relevant TSB amounts for NCCs in the 2025/2026 financial year are summarised in the table below:
A superannuation fund member may be able to claim a deduction for personal contributions made to their super fund with personal after-tax funds. A member will normally be eligible to claim a deduction if:
If the member is eligible and would like to claim a deduction, then they must notify their super fund that they intend to claim a deduction.
The notice must be valid and in the approved form – Notice of Intent to Claim or vary a deduction for personal super contributions (NAT 71121).
The tax legislation provides a notice of intent to claim will be valid if:
The member must provide the notice of intent to claim to the fund by the earlier of:
However, if a super fund member provides a notice of intent after they have rolled over their entire super interest to another fund, withdrawn the entire super interest (paid it out of super as a lump sum), or commenced a pension with any part of the contribution, the notice will not be valid.
This means the individual will not be able to claim a deduction for the personal contributions made before the rollover or withdrawal.
|
2024/2025 |
2025/2026 |
General transfer balance cap |
$1,900,000 |
$2,000,000 |
Defined benefit income cap |
$118,750 |
$125,000 |
CGT lifetime Cap |
$1,780,000 |
$1,865,000 |
Untaxed plan cap - Lifetime |
$1,780,000 |
$1,865,000 |
Superannuation Guarantee – Maximum Contributions base (per quarter) |
$65,070 |
$62,500 |
PCG 2016/5 Safe Harbour rates for related party LRBA’s |
9.35% |
8.95% |
The following thresholds will remain unchanged for the 2025/2026 financial year.
Concessional contribution cap |
$30,000 |
Non-concessional contribution cap - standard |
$120,000 |
Non concessional contribution cap – maximum bring forward over 3 financial years |
$360,000 |
Division 293 – Annual adjusted taxable income |
$250,000 |
From 1 July 2025, the superannuation guarantee rate rose to 12%, impacting payroll, contracts, and cash flow for employers—and opening up new contribution opportunities for individuals.
At WLM Accounting, we help businesses manage their payroll and plan for higher superannuation guarantee business costs, while guiding individuals on maximising personal contributions within the new thresholds.
For a discussion about your business or personal accounting and tax needs, reach out to WLM today.