Superannuation Changes from July 2025
Super is a powerful vehicle for Australians to build wealth for their future.
From July 1, 2025, several key changes to superannuation rules have taken effect. Here's what’s changing and what it means for you:
Superannuation Guarantee (SG) rate increases to 12%
The Superannuation Guarantee, the minimum percentage your employer must pay into your super, has now risen from 11.5% to 12% of your ordinary time earnings.
What this means:
If you're an employee, your employer must contribute 12% of your salary to your super fund. This boost will help grow your retirement savings faster.
Concessional and non-concessional contribution caps
Concessional (before-tax) cap: Remains at $30,000 per year.
This includes employer contributions and salary sacrifice.
Non-concessional (after-tax) cap: Remains at $120,000 per year.
You can still bring forward up to three years of after-tax contributions (up to $360,000 if eligible).
What this means:
You can contribute more to super each year without exceeding the limits, boosting your super investments and taking advantage of tax benefits.
Transfer balance cap increase
The transfer balance cap (the maximum you can move into a tax-free retirement pension) has risen from $1.9 million to $2 million.
What this means:
If you're transitioning to retirement, you can now transfer up to $2 million into the tax-free pension phase of your super, helping high-balance members save more on tax.
Government co-contribution income thresholds updated
The income thresholds for the government co-contribution have increased for the 2025–26 financial year:
Lower income threshold: $47,488
Upper income threshold: $62,488
What this means:
If you're a low or middle-income earner and make personal non-concessional (after-tax) contributions to your super fund, the government may also make a co-contribution up to a maximum of $500.
Spouse Contribution Tax Offset Thresholds
The spouse contribution tax offset remains available, with the following parameters:
Maximum offset: $540
Spouse income threshold for full offset: $37,000
Offset reduces and phases out at spouse income of: $40,000
What this means:
If your spouse earns below $40,000, you may be eligible for a tax offset of up to $540 when making after-tax contributions to their super fund.
Superannuation Paid on Paid Parental Leave
From July 1, 2025, the government will commence paying superannuation on Paid Parental Leave payments. Eligible parents with babies born or adopted on or after this date will receive an additional contribution, based on 12% of their Parental Leave Pay, to their nominated superannuation fund.
The lump sum will be paid following the end of each financial year in which government-funded Parental Leave Pay was paid.
What about LISTO?
The Low Income Superannuation Tax Offset (LISTO) remains unchanged. LISTO is a government payment of up to $500 per year that helps low-income earners grow their superannuation. If you earn $37,000 or less, the government refunds the 15% tax paid on your before-tax (concessional) super contributions. This includes both your employer’s compulsory Superannuation Guarantee (SG) payments and any extra salary sacrifice contributions you make. The refund is paid automatically into your super account if you’re eligible.
For example, if you earn under $37,000 and the total of your before-tax super contributions (your employer’s SG plus any salary sacrifice) is $4,000 for the year, you would pay $600 in tax on those contributions. Thanks to LISTO, the government refunds $500 of that tax back into your super, making it fairer for low-income earners to build their retirement savings.
Overall, these changes are good!
✅ Higher SG rate: More employer contributions mean increased retirement savings.
✅ Increased transfer balance cap: Allows for more funds in the tax-free retirement phase.
✅ More government support: Adjusted thresholds for co-contributions and spouse offsets provide additional avenues to boost your super balance.
👎 No increase to contribution caps, but still generous: You still have the opportunity to contribute more towards retirement within concessional and non-concessional limits.
Ask our team about what extra contributions could do to your super balance and tax savings!
Now is a great time to review your super contributions, salary sacrifice arrangements, and create a long-term plan for growing your money. Super is your money and it’s your future.
This blog is for educational purposes only and is not financial advice. Always check your personal circumstances with a Financial Advisor.
