New Super Guarantee Rate from 1 July 2025: What Employers Need to Know

From 1 July 2025, the superannuation guarantee rate will officially rise to 12%. This increase marks the final step in the government’s legislated plan to strengthen retirement savings for Australians.

If you’re a business owner, this means you must apply the new super guarantee rate to all salary and wages paid to eligible employees from that date. 

It’s not just about adjusting a figure in your payroll software; it’s about making sure your processes are compliant. It’s essential that your calculations are accurate, and your business avoids any risk of underpayment or ATO penalties.

Looking for a bookkeeper in Melbourne? Call us on (03) 9589 0128 or submit an enquiry online.

What is the Superannuation Guarantee?

The superannuation guarantee (SG) is the minimum percentage of ordinary time earnings (OTE) that employers must contribute to their employees’ super funds.

It applies to most workers in Australia, including full-time, part-time, and eligible casual employees. Starting this new financial year, 1 July 2025, the minimum rises from 11.5% to 12%.

Who Needs to Apply the New Rate?

If you employ staff, you’re legally required to make superannuation contributions at the correct rate.

The new super guarantee rate of 12% must be applied to:

• All eligible employees aged 18 and over
• Employees under 18 working more than 30 hours per week
• Certain contractors considered employees for super purposes
• Even temporary residents working in Australia are entitled to SG contributions.

When to Apply the 12% Rate

The ATO requires the new rate to be applied to all payments made on or after 1 July 2025, even if part of the pay period falls before that date.

For example:

If your pay period runs from 25 June to 2 July and you pay employees on 3 July, you must calculate super at 12% for the entire payment.

How to Calculate Super at the New Rate

To calculate the super contribution:

Ordinary Time Earnings × 12% = Super Guarantee Contribution

Your OTE may include:

• Base salary or wages
• Commissions
• Shift loadings
• Paid leave

It generally excludes overtime, expense allowances, and certain lump-sum payments.

The superannuation guarantee calculator on the ATO website can help you confirm the correct amount.

Impact on Small Businesses

While the increase is only 0.5%, it’s important for small business owners to review budgets and payroll settings ahead of time.

Common issues to watch for include:

• Outdated payroll software not reflecting the change
• Underpayments due to miscalculated OTE
• Missing quarterly deadlines, which can lead to the super guarantee charge (SGC)

Preparing Your Payroll for the Change

Updating to the new super guarantee rate involves more than simply changing a percentage in your payroll software, it’s about ensuring your entire process is accurate, compliant, and ready for the new financial year. Small businesses should:

Check payroll system settings

Review your accounting or payroll software to confirm it automatically updates to the 12% rate from 1 July. If you manage payroll manually or use customised settings, you may need to adjust these yourself. 

Also, check that any linked systems, such as timesheet apps or integrated HR platforms, reflect the updated rate.

Review employment contracts and awards

Go through each employee’s contract and any relevant awards to ensure you’re meeting or exceeding the correct super contribution rate. 

Some agreements may require higher contributions or have different payment schedules, so it’s important to cross-check these before the rate change takes effect.

Verify OTE classifications

Make sure you’re calculating super on the correct earnings base. Ordinary time earnings (OTE) generally include salary, wages, commissions, shift loadings, and paid leave, but exclude overtime and some allowances. 

Misclassifying payments is one of the most common causes of underpayment; therefore, reviewing your setup now can prevent costly corrections later.

If you’re unsure, a bookkeeper can audit your payroll setup to ensure you meet your obligations.

Communicate with staff

Let employees know about the change to the superannuation guarantee rate so they can check their payslips and understand how it affects their super balance. A quick email or team meeting can help maintain transparency and build trust.

Why Compliance Matters

Meeting your employer obligations for super is more than just a legal requirement, it’s essential for maintaining trust with your team and avoiding costly repercussions.

• ATO penalties and administration fees
• Paying interest on missed contributions
• Reputational damage with staff

As this is the final legislated increase, now is the perfect time to review your super processes and ensure your payroll runs smoothly.

Knowing how to manage your payroll effectively ensures you meet deadlines, calculate contributions accurately, and stay compliant.

Key Dates to Remember

• 1 July 2025: New 12% SG rate begins — applies to all payments made on or after this date.
• 28 October 2025: First quarterly SG payment deadline using the new 12% rate (for the July–September 2025 quarter).
• 28 January 2026: SG payment deadline for the October–December 2025 quarter.
• 28 April 2026: SG payment deadline for the January–March 2026 quarter.
• 28 July 2026: SG payment deadline for the April–June 2026 quarter.

Also read: Due dates for lodging and paying your BAS for another important compliance deadline to keep on your radar.

Common Employer Mistakes to Avoid

When a rate change happens, it’s easy to make errors that can be costly later. The most common include:

• Applying the wrong rate for payments that cross financial years
• If you process payroll manually, forgetting to update your spreadsheets for the new 12% rate can result in underpayments. This is especially risky for businesses not using automated payroll software that updates rates automatically.
• Not reconciling super contributions with payslips
• Missing payment deadlines and incurring the SGC

An experienced bookkeeper can update your payroll settings for the new super guarantee, reconcile super contributions each quarter, and identify errors before they become ATO compliance issues. 

For small business owners, outsourcing payroll management can save time, reduce stress, and ensure compliance year-round.

Get Ready for the Change

The superannuation guarantee rate increase is an important step towards better retirement outcomes for employees, but it also means extra responsibility for employers.

By preparing early, updating payroll systems, and staying on top of deadlines, you can remain compliant and avoid unnecessary stress.

If you want to stay updated with compliance changes, need help reconciling contributions, or ensuring your payroll runs accurately, Maximum Business Solutions can handle it for you from start to finish. 

Call us on (03) 9589 0128 or submit an enquiry to get started.