As we approach the 2025–26 financial year, several significant changes to Australia’s superannuation system are set to take effect from 1 July 2025. These updates are crucial for both employers and employees to understand, as they can impact retirement planning and financial strategies.
1. Increase in Superannuation Guarantee (SG) Rate
The Superannuation Guarantee rate will rise from 11.5% to 12% starting 1 July 2025. This means employers are required to contribute 12% of an employee’s ordinary time earnings to their super fund. While this enhances retirement savings for employees, employers should review payroll systems to ensure compliance.
2. Transfer Balance Cap (TBC) Rises to $2 Million
The Transfer Balance Cap, which limits the amount of superannuation that can be transferred into a tax-free retirement phase, will increase from $1.9 million to $2 million. This adjustment allows individuals to transfer more funds into a tax-free environment, benefiting those nearing retirement.
3. Concessional Contributions Cap Remains at $30,000
The concessional contributions cap will stay at $30,000 for the 2025–26 financial year. This cap applies to pre-tax contributions, including employer contributions and salary sacrifice amounts.
4. Proposed Additional Tax on Super Balances Over $3 Million
The government has proposed an additional 15% tax on earnings from superannuation balances exceeding $3 million, effective from 1 July 2025. This measure aims to make the super system more equitable, though it is expected to affect a small percentage of high-balance accounts.
5. Updates to Government Co-Contribution Thresholds
The income thresholds for government co-contributions will see slight increases. The lower threshold will rise to $47,488, and the higher threshold will increase to $62,488. These adjustments may affect eligibility for government co-contributions to superannuation.
The 2025–26 superannuation changes present both opportunities and challenges for individuals and businesses alike. With increases to the Super Guarantee rate and the Transfer Balance Cap, there’s potential for greater retirement savings—but it also means ensuring your financial strategies and payroll systems are up to date.
Staying informed and taking proactive steps now can help you make the most of these updates and avoid costly compliance issues. If you’re unsure how these changes affect your personal or business finances, Matovic Business Accountants is here to help. Our team is ready to guide you through the new thresholds, contribution strategies, and tax implications—so you can move forward with confidence.
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