With the start of the 2025/2026 financial year, several important changes to superannuation have come into effect. Whether you’re an employer managing payroll or an individual planning personal contributions, understanding these updates is essential to staying compliant and making informed financial decisions.
1. Super Guarantee Rate Increases to 12%
As of 1 July 2025, the Superannuation Guarantee (SG) rate has increased from 11.5% to 12%. This is the final stage of the legislated SG increases and impacts both employer obligations and employee take-home pay in certain contract structures.
Key actions for employers:
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Update payroll software to apply the 12% SG rate from 1 July 2025 pay runs onward.
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Review employment agreements, especially where remuneration is inclusive of superannuation. Without adjustments, the increase could reduce an employee’s take-home pay.
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Assess the impact on cash flow, as higher super payments may affect your business’s operating budget.
Failure to correctly apply the SG rate can result in penalties, loss of tax deductions, and administration charges.
2. Contribution Caps, Timing, and Claiming Deductions
Understanding contribution caps and how personal contributions interact with your total super balance (TSB) is key to making the most of your super in this financial year.
Contribution Caps:
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Concessional contributions cap: $30,000
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Non-concessional contributions (NCC): $120,000 annually
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Bring-forward rule: Up to $360,000 over 3 years for eligible individuals
Bring-forward eligibility (based on your TSB at 30 June 2025):
| Total Super Balance (TSB) | NCC Cap | Bring-Forward Period |
|---|---|---|
| Less than $1.76 million | $360,000 | 3 years |
| $1.76m – $1.88 million | $240,000 | 2 years |
| $1.88m – $2.0 million | $120,000 | None |
| $2.0 million and above | Nil | Not allowed |
Claiming Personal Contribution Deductions:
If you’re planning to claim a tax deduction for personal contributions:
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Lodge a valid Notice of Intent to Claim
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Receive an acknowledgment from your super fund
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Ensure the notice is submitted before lodging your tax return or by 30 June 2026, whichever comes first
If you withdraw, roll over, or start a pension before lodging your notice, the deduction may become invalid.
3. Updated Super and Tax Thresholds for 2025/26
Several thresholds have been revised for the new financial year. These changes can affect contribution strategies, capital gains tax planning, and defined benefit pensions.
Updated thresholds:
| Threshold | 2024/25 | 2025/26 |
|---|---|---|
| General Transfer Balance Cap | $1.9m | $2.0m |
| CGT Lifetime Cap | $1.78m | $1.865m |
| Defined Benefit Income Cap | $118,750 | $125,000 |
| Untaxed Plan Cap – Lifetime | $1.78m | $1.865m |
| Safe Harbour Interest Rate (PCG 2016/5) | 9.35% | 8.95% |
| SG Maximum Contributions Base (quarter) | $65,070 | $62,500 |
Unchanged thresholds:
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Concessional contributions cap: $30,000
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Standard NCC cap: $120,000
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Maximum bring-forward NCC: $360,000
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Division 293 income threshold: $250,000
These thresholds affect not only super contributions, but also taxation of defined benefits and eligibility for various tax concessions.
Stay Informed and Get Advice
The combination of rate changes, contribution limits, and threshold updates make this a good time to review your payroll systems, employee agreements, and personal retirement strategies.
If you’re unsure how these changes affect you or your business, we’re here to help.
Contact us to ensure you’re on the right track this financial year.
