Super Guarantee Rate Increase

Starting 1 July 2025, the Superannuation Guarantee (SG) rate in Australia will increase from 11.5% to 12%. This marks the final step in a series of scheduled increases aimed at enhancing retirement savings for Australian workers.

What Is the Superannuation Guarantee?

The Superannuation Guarantee is the minimum percentage of an employee’s ordinary time earnings that employers are legally required to contribute to their superannuation fund. This system was introduced to help Australians accumulate savings for retirement, reducing reliance on the Age Pension.

Considerations for Employers

Employers must ensure their payroll systems are updated to reflect the new 12% SG rate from 1 July 2025. This change applies to all ordinary time earnings paid on or after this date, regardless of when the work was performed. Failure to comply may result in penalties, including the Superannuation Guarantee Charge (SGC).

Small and medium-sized businesses, in particular, should assess the financial implications of this increase and plan accordingly to manage the additional payroll expenses.

Impact on Employees

For employees, the increase to a 12% SG rate means more money will be directed into their superannuation accounts. For instance, an individual earning $60,000 annually will see their employer’s super contribution rise from $6,900 to $7,200 per year. Over time, this additional 0.5% can significantly boost retirement savings due to the effects of compound interest.

The increase to a 12% Superannuation Guarantee rate represents a significant step towards strengthening the retirement savings of Australian workers. Both employees and employers should take proactive steps to understand and adapt to these changes, ensuring compliance and optimizing financial outcomes.

Contact the team at Lockwood Partners to discuss how this change affects you and your business.