Superannuation Guarantee Increase to 12%
11 mins read
Published Jul 1, 2025
The final scheduled increase of the Superannuation Guarantee (SG) took effect, moving the rate from 11.5% to 12%. This is a critical threshold for "threshold monitoring" apps, as any miscalculation here affects the total cost of labor and historical audit accuracy. For the construction sector, where "all-in" hourly rates are common, failing to adjust the super component leads to immediate underpayment of the base wage.
The Change
On 1 July 2025, the Superannuation Guarantee (SG) rate made its final scheduled increase, rising from 11.5% to 12%. This completes the legislated path toward higher retirement savings that began several years ago. This 12% rate applies to all Ordinary Time Earnings (OTE) paid on or after 1 July, regardless of whether the work was performed in June.
Implications for SMB Owners
The jump to 12% directly tightens business cash flow. For a construction firm or retail chain with a large workforce, an extra 0.5% on the total wage bill is a significant unbudgeted expense. The complexity for SMBs often lies in "Total Package" contracts. If an employee is on a contract of $80,000 "inclusive of super," their take-home pay must actually decrease to accommodate the higher super contribution.
If an owner fails to adjust the take-home pay, the business absorbs the cost. Conversely, if they fail to increase the super contribution, they face the Superannuation Guarantee Charge (SGC)—a non-tax-deductible penalty that is far more expensive than the original payment. Monitoring the "Super Threshold" is now a quarterly necessity to avoid ATO audits.
