A new superannuation guarantee (SG) rate will come into effect from the 1st of July, 2025. The rate will increase from 11.5% to 12%, and you should check your payroll calculations to continue paying your team the right super entitlements.
If you’re using foundU, these increases are automatically updated in our payroll software each year. This gives you peace of mind and ensures that your team’s super entitlements are paid correctly.
If you’ve worked in payroll over the last few years, you’ll already be familiar with superannuation guarantee increases.
The SG rate has increased each financial year since 2021. It was steady at 9.5% from the 1st of July 2014 to the 30th of June 2021. Since then, it has gradually increased by 0.5% every financial year. This has been due to a change in legislative requirements, which are part of Australia’s broader initiatives to financially prepare its workforce for retirement.
On the 1st of July, 2025, the final stage of the planned increase will occur. This will see the minimum required superannuation guarantee rate increase from 11.5% to 12%.
That means that employers will be legally required to pay their eligible workers 12% of their ordinary earnings as superannuation to a complying super fund or retirement savings account. This change will apply to payments made on or after the 1st of July, 2025.
For example, if your payroll period ends on the 29th of June and is processed on the 1st of July, this payroll should be paid at 12% super.
Australia has an ageing population and a longer average life expectancy. People’s finances need to support them for a longer time in their retirement years. The move also aims to reduce pressure on Australia’s Age Pension.
The higher SG rate will impact Australian employers financially. It should be factored into your payroll calculations, and you need to plan your finances accordingly.
Make sure you understand which of your workers are entitled to the superannuation guarantee increase. You may need to seek out legal or HR advice to ensure that you are reviewing your employment contracts correctly.
From there, check that your payroll software is calculating your employees’ superannuation entitlements at the new rate of 12%. This will help ensure that you meet your legal requirements and avoid underpayments. Underpayments can be treated as a criminal offence, and you could be required by the Australian Tax Office (ATO) to pay the superannuation guarantee charge (SGC), which includes all amounts owing, plus interest and an administration fee.
If you’re a customer of foundU, the super guarantee increase will be automatically applied to your platform from the 1st of July, 2025. This will give you peace of mind and help you focus on managing your finances.
The superannuation guarantee increase to 12% will have an impact on your business costs. Even if your annual payroll remains constant, you will now be required to make larger superannuation contributions compared to the previous financial year. While a 0.5% increase might sound small, the costs can add up quickly.
Make sure you monitor the increased costs and factor them into your financial planning and budgeting for the new financial year.
If you’re managing payroll with foundU, you can use the dedicated superannuation payment portal to keep track of your super liabilities as they accrue. As shifts are worked and approved, the hours will flow into payroll with wages and super payments automatically calculated for each employee. You can then monitor individual and total super accruals via the portal and make your payments at your chosen interval.
You will also get reminders as your payment date approaches, so you’re aware of the upcoming impact on your cash flow.
Make sure that your team is aware that they are being paid at the increased superannuation guarantee rate. This will help create trust and transparency in your workforce. If you’re using foundU, you could communicate the change to relevant employees via our dedicated employee app, SMS, or email. The changes to the super guarantee rate will also be automatically reflected in their pay slips paid on or after July 1, 2025.
The increased SG rate, along with the proposed Payday Super legislation set for July 1, 2026, will impact your cash flow. If you’re concerned about paying super more frequently and at a higher rate, then you may need to lean on payroll automation. Automated super calculations and payments will help you pay with more precision, and free up your capacity to monitor the financial impact of these changes on your business.
Want to learn more about how foundU can help you streamline payroll and superannuation? Book a demo with one of our product experts.