As we move toward the new financial year, several significant superannuation changes come into effect from 1 July 2025. Some are long-anticipated improvements; others introduce complexity, particularly for those with larger balances.
Here’s what’s changing, what’s proposed, and how it could impact your retirement planning strategy.
💼 Super Guarantee Increases to 12%
The compulsory super contribution from employers will increase to 12% of your salary. For most working Australians, this is a welcome step toward a more robust retirement balance.
Even small increases like this can translate to tens of thousands in extra super by the time you retire. If you’re running your own business or managing your own payroll, it’s a timely reminder to adjust your systems for compliance.
If you are making salary sacrifice contributions, you may need to review these contributions inline with the increase in employer contributions to ensure you don’t breach the contributions cap.
🍼 Super Will Be Paid on Paid Parental Leave
For the first time, super will be included in government-funded Paid Parental Leave payments from July 2025. The ATO will handle these contributions directly into super funds, aligning them with the Super Guarantee.
This helps address the super gap often experienced by new parents, particularly women, during time away from the workforce.
First lot of payments will occur in the 2026/27 financial year.
🔝 Transfer Balance Cap Lifting to $2 Million
The cap on how much you can move into the tax-free retirement phase increases from $1.9 million to $2 million. If you’re approaching retirement or already in pension phase, this presents an opportunity to revisit your strategy.
It may allow for more tax-free income in retirement—or for some, a reason to consider drawing down from accumulation to increase what sits in pension phase.
If you have commenced a pension prior to the 1st July 2025, you won’t be eligible for the $2M cap, your cap will be lower.
⚠️ Proposed Tax on Super Balances Over $3 Million
This proposal is not yet law but worth noting. The government intends to introduce an additional 15% tax on earnings over $3 million in super, including unrealised capital gains.
While it’s expected to apply to a relatively small number of individuals initially, the lack of indexation means more Australians may be caught over time. If your total super balance is nearing $3 million or projected to do so it’s time to start thinking about your long-term structure.
But please note, it’s not worth making irrational decisions if this may impact you, it’s a discussion to be had and what options are there.
🧾 Contribution Strategy Reminders
- Concessional cap: $30,000 per year
- Non-concessional cap: $120,000 per year (or up to $360,000 under bring-forward rules and your balance as at 30 June 2025).
- Carry-forward Unused Concessional Contributions: Still available if your total super balance was under $500,000 at the previous 30 June based on the prior 5 financial years. These contribution opportunities remain valuable for building retirement wealth and managing tax outcomes, especially in high-income years or during asset sales.
🕵️ Payday Super Starts 1 July 2026 – to be confirmed
While not effective this year and still to be legislated, employers may soon be required to pay super at the same time as wages rather than quarterly. This change aims to reduce missed or late super payments and improve long-term balances for all workers.
If you are an employer, you may want to start implementing this in your business to iron out any kinks or cashflow issues you may incur. Please speak with your bookkeeper and accountant about this and how it may impact your business.
📞 Let’s Talk Strategy
These changes present a great opportunity to refine your super strategy, whether you’re growing your balance, planning retirement income, or managing a larger fund.
If you’d like to explore what this means for you specifically, please feel free to reach out.
