Understanding the superannuation rate for 2025

Author

The Rippling Team

Published

9 October 2024

Updated

21 October 2025

Read time

5 MIN

In this article

On 1 July 2025, the superannuation guarantee rate went up from 11.5% to 12%.

It's a small change on paper, but one that can have a big impact on wages, budgets, and compliance. If you run a business or manage HR, it’s worth taking a moment to understand what this new rate means for you.

2025 superannuation rate in Australia

As of 1 July 2025, every employer in Australia must pay 12% of each eligible employee’s ordinary time earnings (OTE) into that employee’s chosen super fund.

In simple terms, for every $100 your eligible employee earns, you’ll now need to contribute $12 to their superannuation account instead of $11.50.

The move to 12% wasn’t a surprise. It’s the final step of a strategy first announced over a decade ago to help Australians retire with more savings and rely less on the government’s Age Pension.

By increasing the super guarantee (SG) rate, more money flows into super funds. The funds then invest that money across infrastructure, property, and major national projects. So, it benefits more than just individuals. It also supports long-term economic growth.

Learn more about how superannuation works

Why the super rate matters for employers

Here’s what to keep in mind:

Payroll accuracy: When the SG rate changes, payroll calculations need to change with it. Even a small oversight can lead to underpayments, backpay nightmares, and penalties from the Australian Taxation Office (ATO).
Budgeting and forecasting: That extra 0.5% may not sound like much, but it adds up quickly across an entire workforce's SG contributions. You need to factor the 12% rate into future labour budgets, pay reviews, and forecasts to avoid unexpected cost blowouts.
Employee satisfaction and retention: Paying super correctly builds trust. Employees notice when you pay their super on time and at the right rate. It’s a simple way to show that your business values their financial wellbeing.
Compliance risk: Missing payments or applying the wrong rate can trigger audits and extra charges from the ATO. Staying on top of your superannuation obligations now can save a lot of stress (and money) later on.

Put any process, including superannuation management, on autopilot.

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5 tips for staying compliant

Superannuation compliance doesn’t need to be complicated. But it does need to be consistent. Here are a few simple ways to stay on top of the 12% rate and avoid landing in hot water with the ATO:

Update your payroll systems: Make sure your payroll software is set to calculate super at 12%. Even a small mismatch can cause underpayments that you’ll need to fix down the track.
Use automated payroll software built for Australia: The easiest way to stay compliant is to automate it. Payroll software designed for the Australian market can automatically apply the correct SG rate, track payment due dates, and handle SuperStream requirements for you.
Pay super on time, every time: You need to pay super at least quarterly (by the 28th day after the end of each quarter). You can't claim late payments as a tax deduction. These late payments may also attract the Super Guarantee Charge (SGC).
Include all eligible workers: Super applies to most employees and many contractors, depending on their working arrangement. If you’re unsure, check the ATO’s rules to make sure you cover everyone you need to.
Keep clear records: Hold onto proof of all payments, employee details, and super fund information. Good records make reporting easier and can protect your business if you ever get audited.

Looking ahead

After years of gradual increases, the SG has now reached its target rate of 12%. There are no further rises scheduled under current legislation. That gives employers some stability to plan payroll and labour costs without worrying about annual SG increases.

The next big shift to prepare for is Payday Super. This reform is set to roll out at the beginning of the next financial year (1 July 2026). It will require employers to pay super at the same time as wages, rather than quarterly. The aim is to make payments faster, reduce unpaid super, and help employees see their contributions in real time.

If you haven’t already, now’s the time to check your payroll system and make sure it can handle this upcoming change. Employers using automated payroll software will be better placed, as most of these systems already process and report in real time.

Other upcoming focus areas

Stronger ATO enforcement on unpaid super

The ATO’s collectable SGC debt as at 30 June 2024 was approximately $2.15B. This shows how many businesses are still lagging behind. As such, the ATO has signalled tougher action against unpaid or late super payments.

Expect more data-matching, real-time reporting, and follow-ups, especially once payday super comes into effect.

Greater transparency for employees

Employees are increasingly empowered to spot shortfalls in their super. This is mostly thanks to digital payslips and real-time fund apps. With most major funds now offering mobile notifications for incoming payments, employees can see instantly if their employer hasn’t paid on time.

This increased level of visibility means that missing or delayed payments are fairly obvious. And employees are more likely to raise concerns or lodge a complaint if something's not right.

Super fund reporting and compliance standards

The broader superannuation system in Australia now manages more than $4T in assets. And, as mentioned, the regulatory spotlight on funds and employers is sharper than ever.

This means that your records matter more than ever. Keeping up-to-date proof of payments, correct fund details and demonstrating that you made contributions on time will reduce the risk of audit or penalty.

Contractor classifications under review

When engaging contractors, the distinction between 'contractor' and 'employee (for SG purposes)' is under greater scrutiny. According to the ATO, if you pay a contractor 'mainly for their labour', you may need to treat them as an employee for SG purposes.

Mis-classifying a worker can lead to unpaid SG obligations, which flow into the broader unpaid super gap. It’s wise to review contract and labour arrangements now and ensure you meet SG obligations where you should.

Your business is complex. Payroll software shouldn’t be.

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Streamline superannuation compliance with Rippling

Superannuation can be one of the trickiest parts of running payroll. The rules keep changing, deadlines are tight, and the ATO expects complete accuracy. Between changing rates, contribution caps, and upcoming payday super rules, it’s a lot to stay on top of.

The good news is that Rippling can do a lot of the heavy lifting for you. It automatically calculates and pays super at the right rate and sends contributions to the clearing house on time. It also updates itself when the laws change. Plus, it can collect Standard Choice Forms when you onboard new staff and keeps fund details tidy and audit-ready.

Rippling isn’t just payroll software either. It brings HR, Payroll, and IT together in one system built on a single source of truth. That means all your employee data, pay details, and compliance records stay connected and accurate, minus the manual work.

FAQs

When will the super rate change again?

The superannuation guarantee rate has now reached its final target of 12%. There are no further increases scheduled. However, the Australian Government reviews superannuation policy from time to time. So, it's worth keeping an eye on any future updates that could affect payroll.

Can contributions exceed the superannuation guarantee?

Yes. Employers and employees can make extra payments above the 12% rate. These are called concessional contributions. These contributions use pre-tax income, and the ATO charges 15% tax on them. The concessional contributions cap for the 2025–26 income year is $30,000. The ATO taxes anything above that at the employee’s normal tax rate.

What is the maximum super contribution base?

The maximum super contribution base is the upper earnings limit the ATO uses to calculate compulsory super contributions. It puts a cap on how much of an employee’s pay attracts the 12% SG each quarter.

For the 2025–26 financial year, the limit is $62,500 per quarter. This means you only need to pay super on the first $62,500 of an employee’s ordinary time earnings in that period. If someone earns more than that in a quarter, you don’t have to pay additional super on the extra income. But you can choose to if you want to offer it as an employee benefit.

How do individual employee earnings affect super?

You calculate super based on each individual employee’s earnings base. This is usually their ordinary time earnings, which includes wages paid, bonuses, and most allowances. You don't include overtime because it doesn’t count as ordinary time earnings.

Make sure your payroll system correctly identifies what’s included in each individual employee’s earnings base so your super calculations are correct.

Do I need to pay super on paid parental leave?

You don’t have to pay super on government-funded paid parental leave. But you might need to if your business offers its own paid parental leave scheme.

What happens if I exceed the maximum limit on contributions?

If an employee's super contributions go over the concessional or non-concessional contribution caps, the ATO treats the extra money as part of their normal income. That means the employee pays tax on the excess at their usual income tax rate, minus a 15% credit for the tax already paid inside their super fund.

Employees can also ask their fund to withdraw the extra amount to help cover the tax bill. It’s a good idea to track contributions throughout the year to ensure you don't go over the cap. This is especially true if you or your employees make extra payments.

Stay ahead of superannuation compliance with Rippling

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Disclaimer

Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting and legal advisers before engaging in any related activities or transactions.