Super’s Going Up to 12% – Here’s What You Need to Know
The ATO has confirmed it: the Superannuation Guarantee (SG) is increasing to 12% from 1 July 2025. This is part of the government’s long-term plan to help Australians build more savings for retirement. But what does that mean for you, whether you’re an employee, a business owner, or just trying to make sense of it all? Let’s break it down.
First Up – What’s the Super Guarantee Again?
If you’re working, your employer has to put a percentage of your earnings into your super fund. That’s the Super Guarantee. Right now, it’s 11.5%, but come July 2025, it’s going up to 12%.
Why’s It Going Up?
This isn’t a surprise move – it’s been on the cards for a while. The Superannuation Guarantee (Administration) Act 1992 laid out a plan to gradually boost the SG rate. The goal? Help Aussies retire with more savings and take some pressure off the Age Pension.
What This Means for Workers
If you’re an employee:
- More money for retirement – That extra 0.5% adds up over time.
- Your pay might shift – Depending on your contract, your employer might absorb the increase or adjust your salary package.
- Compound interest is your friend – Even a small increase in contributions can make a big difference down the track. You will be at retirement age before you know it!
What This Means for Employers
If you run a business, you’ll need to be ready:
- Update your payroll – Make sure your systems are ready to apply the new rate.
- Adjust your budget – That extra 0.5% might not seem like much, but across a big team, it adds up. For example if gross payroll is $700,000, a bump in half a percent will add an additional $3,500 to your existing labour costs.
- Talk to your team – Keep your staff in the loop so there are no surprises.
Special Note: Hospitality Businesses, Take Heed
Hospitality venues often run on thin margins and rely heavily on casual staff. The SG bump could hit harder here:
- Rising wage costs – Casual staff still get super, so expect increased outgoings.
- Cashflow crunch – If you have seasonal or inconsistent income, budgeting just got a bit trickier.
- Pricing and efficiency – You might need to rethink menus or rosters to make up for the extra costs.
- Staffing strategies – It could be time to review how and when you roster your team.
Bigger Picture: What It Means for Australia
Beyond your own business or pay packet, the SG increase has some wider effects:
- Less strain on the pension system – More self-funded retirees = less pressure on the government.
- More money in super funds – That means more investment in Australian infrastructure and projects.
- Potential wage impacts – Some employers may slow down pay rises to offset the increase.
How to Get Ready
Here’s what you can do now:
- Employees – Check your super statements, maybe throw in a few extra dollars to your super, and consider chatting with a financial adviser.
- Employers – Double-check your payroll setup, budget ahead, and make sure your team understands what’s coming.
Wrapping It Up
The bump to 12% super might seem small now, but it’s a big deal in the long run. Whether you’re working a shift, running a venue, or planning for the future, getting prepared now will make things a whole lot easier.
Want more details? Head to the ATO website or talk to a registered bookkeeper to see how this will play out for your business.
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