Super Guarantee Now 12%: What Employers Need to Know

The superannuation guarantee (SG) rate officially increased to 12% on 1 July 2025. This change applies to ordinary time earnings (OTE). It marks the final step in a planned, gradual rise set by earlier decisions.

What Changed Exactly?

The old SG rate was 11.5%. This applied up till 30 June 2025. The new rate is 12%, effective from 1 July 2025 onwards. Employers must now use this higher rate for all relevant employee super payments.

This increase directly impacts business operations. Employers need to consider cash flow implications. Payroll accruals will be higher. Employment contracts might also need review, especially where total remuneration packages include superannuation within the total figure.

Key Steps for Employers

Take these actions promptly to ensure compliance. 

First, update your payroll software immediately. Confirm it correctly calculates the new 12% SG rate for all pay runs since 1 July 2025. Accuracy here is essential.

Next, carefully review your employment agreements. Contracts stating pay is ‘inclusive of super’ need particular attention. Under these contracts, employee take-home pay could decrease unless you renegotiate terms or choose to absorb the extra 0.5% SG cost yourself.

Finally, budget for the higher mandatory contributions. Factor this increased expense into your financial planning. Understand the potential cash flow impact this change creates for your business.

Remember the serious consequences of getting SG payments wrong. Late or incorrect payments attract significant penalties. Employers may lose tax deductions and face interest charges plus administrative penalties.