Australia’s 2025 Superannuation Increase – How It Affects Your Salary

Starting 1 July 2025, millions of Australians will see a boost in their retirement savings as the Superannuation Guarantee (SG) rate increases from 11% to 11.5%. While the change may seem minor at first glance, it’s part of a bigger plan by the government to elevate the SG rate to 12% by 2026.

This shift brings important consequences for both employees and employers, setting the stage for stronger retirement stability across the country.

Adjustment

Superannuation is like a long-term savings account built over a lifetime of work. The SG is a mandatory contribution that employers make into each employee’s super fund, based on a set percentage of their ordinary earnings.

The increase from 11% to 11.5% is part of a staged approach under the Superannuation Guarantee (Administration) Act. While half a percent may not sound like much, over the decades, it significantly boosts retirement balances thanks to the magic of compounding interest.

Earnings

If you’re wondering how this affects your paycheck—the answer depends on how your salary is structured. For workers on a base salary plus super arrangement, this change is all good news; your take-home pay won’t change, and your retirement fund just got a bump.

But for those on total remuneration packages, that half-percent may come out of your base salary unless employers increase total pay. That’s why it’s smart to check your employment contract and speak with HR if you’re unsure.

Growth

Here’s the real win: compound growth. A half-percent extra going into super each year means more money working for you over time. For younger workers, especially, the benefits multiply over the years.

This rise is part of a broader strategy to reduce future reliance on the age pension by helping Australians retire with more of their own savings. With people living longer than ever, this makes a lot of sense.

Timeline

This increase to 11.5% is the second-last step before reaching the 12% target. The final increase is scheduled for the 2026–2027 financial year. The government’s gradual rollout gives businesses time to adapt while encouraging Australians to stay engaged with their super.

It’s also a perfect time to review your super account—look at your fund’s performance, check what fees you’re paying, and adjust your investment options if needed.

Employers

Businesses have a big role to play in this transition. Updating payroll systems, communicating with staff, and ensuring contributions are accurate and on time are key responsibilities. For larger companies with HR departments and payroll software, this is usually seamless.

But smaller businesses might need extra help or advice to stay compliant. It’s not just about avoiding penalties—it’s about supporting employees’ futures.

Awareness

This change is also a great reminder: your superannuation is your future paycheck. It’s not enough to just let it sit there. Log in, check your fund’s health, compare it to others, and ask questions if you’re unsure.

Even small adjustments today can make a big difference tomorrow. With the SG rate moving upward, now is the ideal time to take control of your financial future.

Future

The upcoming SG rise is more than a legal requirement—it’s a financial opportunity. For employees, it’s about getting more out of your working years. For employers, it’s about fulfilling responsibilities and supporting staff.

For everyone, it’s a step toward a more stable retirement system. By staying informed and proactive, Australians can turn this policy shift into personal gain.

FAQs