Superannuation Guarantee Increasing to 12% from 1 July 2025: What You Need to Know
From 1 July 2025, the Superannuation Guarantee (SG) rate will increase from 11.5% to 12% of ordinary time earnings. This is the final step in a series of scheduled increases aimed at improving retirement outcomes for Australian workers.
Here’s what this change means for both employers and employees, and what you should be doing now to prepare.
📈 What Is Changing?
- The SG rate will increase from 11.5% to 12%
- This applies to all eligible employees
- This rate applies for payments of ordinary time earnings to eligible employees on and after 1 July, even if some or all of the pay period it relates to is before 1 July.”
This change is legislated under the Superannuation Guarantee (Administration) Act 1992, and forms part of the government’s long-term plan to help Australians build their retirement savings.
👩💼 For Employers: What You Need to Do
- Review Payroll Settings
Ensure your payroll software (e.g. Xero, MYOB, QuickBooks) is updated to apply the 12% SG rate from 1 July 2025. Most cloud-based platforms will apply this automatically, but it’s still worth double-checking. - Budget for Increased Costs
This increase will raise your total employment cost per employee, especially if you pay super on top of base salary (rather than under a salary-sacrifice or total remuneration model). - Communicate with Staff
Employees may notice an increase in their super contributions on their payslip. If you’re on a total remuneration package basis, the change may slightly reduce their take-home pay—open communication helps manage expectations. - Check Employee Eligibility
The SG rate applies to full-time, part-time, and casual employees. From 1 July 2022, there is no longer a $450 monthly minimum threshold.
👨💻 For Employees: What It Means for You
- From 1 July 2025, your employer will contribute 12% of your ordinary time earnings into your super fund.
- Over time, this extra 0.5% can make a significant difference to your long-term super balance, thanks to compounding returns.
- If you’re on a total package arrangement, check with your employer whether the increase will be added on top of your salary or absorbed into your total package.
💡 Tip: Log into your MyGov account to check your super contributions and balance.
✅ Need Help With Payroll or SG Compliance?
If you’re unsure how the 12% SG change affects your payroll, employment contracts or software setup, I’m happy to assist. We can review your current systems and ensure you’re ready for the new rate before the deadline.
📩 Contact me at admin@bectax.com.au or book a meeting—available via Teams, phone or in person.
⚖️ Disclaimer
This article is general in nature and does not consider your specific financial or employment situation. You should seek professional advice before making any decisions in relation to superannuation obligations or entitlements.