Changes to superannuation

Superannuation will be paid on Government funded Paid Parental Leave (PPL) for parents of babies born or adopted on or after 1 July 2025.

Payments will be made annually to individuals’ super funds from 1 July 2026. This will help to reduce the impact of career breaks to care for young children on superannuation balances.

Analysis by the Super Members Council (SMC) shows a mother of two who received super on the Scheme would be $14,500 better off in retirement. A mother of one child would be $7,500 better off (Superannuation Members’ Council, 2024-25 Pre Budget-Submission, January 2024).

AustralianSuper has campaigned for this change for many years as a measure to help address structural inequalities that contribute to lower superannuation balances for women at retirement.

The start date for this measure is 1 July 2025 with the Government estimating that approximately 180,000 families per year will benefit from superannuation on paid parental leave.

As part of the 2024-25 Federal Budget, the Treasurer announced a 12-month extension to 30 June 2025 of the current freeze in deeming rates for retirees.

This measure will assist part pensioners with bank deposits, investments and also super pension income streams which are captured under the deeming rules. The measure will allow retirees to benefit from increases in interest rates and returns without reductions in their age pension.

The deeming rate has been frozen for the last two years with the top rate unchanged at 2.25%.

Super guarantee

From 1 July 2024, the super guarantee, that is - the percentage of your wage that your employer is required to pay into your super account, will increase from 11.0% to 11.5%. The super guarantee will continue to rise in 0.5% increments until it reaches 12% in 2025.

Refer to the Australian Taxation Office (ATO) website for full details.

Changes to super tax concessions

On 28 February 2023, the Australian Government announced from 1 July 2025 a 30% concessional tax rate will be applied to future earnings for superannuation balances above $3 million, instead of the current 15%. This measure is not yet law.

Detailed information can be found on the ATO websites and in the Treasury Superannuation Concessions Factsheet.

Increase in super contribution caps

From 1 July 2024, both concessional and non-concessional contributions caps will be increasing as follows:

Contribution caps	2023-24	2024-25
Concessional Contributions Cap	$27,500	$30,000
Non-Concessional Contributions Cap	$110,000	$120,000
Bring forward	$330,000 over 3 years	$360,000 over 3 years

The total super balance for non-concessional contributions, remains at $1.9 million. The general transfer balance cap also remains unchanged at $1.9 million.

Full details on concessional caps can be found ATO website.

Full details on non-concessional caps can be found ATO website.

Payday super

From 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages. This delayed start date provides employers, super funds, payroll providers and other parts of the superannuation system with sufficient time to prepare for the change. This measure is not yet law.

Details on Payday super can be found on the ATO website.

Individuals with balances over this threshold will be subject to an additional tax of 15 per cent on the earnings on any balance that exceeds the $3 million threshold. Individuals with total superannuation balances (TSBs) over $3 million at the end of a financial year will be subject to an additional tax of 15 per cent on earnings. This tax is in addition to any tax their superannuation funds pay on earnings in accumulation. As announced, the $3m threshold is not indexed.

Proposed start date: 1 July 2025

The Government will introduce legislation requiring employers to pay super on payday instead of every quarter as is currently the case. This will take effect from 1 July 2026.

The Australian Taxation Office (ATO) will receive additional resourcing to help it detect unpaid super payments earlier and the Government will set enhanced targets for the ATO for the recovery of payments.

These changes will improve retirement outcomes for around 8.9 million employees, including for young and low-income workers who are most likely to have unpaid super.

The 1 July 2026 start date is intended to provide employers, superannuation funds, payroll providers and other parts of the superannuation system with sufficient time to prepare for the change.

Proposed Start date: 1 July 2026

The Treasurer announced the allocation of $5.0 million over 5 years from 2023–24 to continue a superannuation consumer advocate to improve members’ outcomes.

The Treasurer made no commitment to paying super on Commonwealth Parental Leave Pay as part of the 2023-24 Federal Budget.

The temporary 50% reduction in minimum drawdown rates has not been renewed. This means that the drawdown rates revert to previous settings. Details of these settings can be found on the ATO website.

No changes were announced to the Low Income Super Tax Offset (LISTO). The income threshold for LISTO will remain at the current $37,000. Please find more details on LISTO.

The Government will introduce legislation requiring employers to pay super on payday from 1 July 2026.

• Currently employers are required to pay the Super Guarantee on at least a quarterly basis.
  
  
• This timing will be changed so employers will be required to pay superannuation on the same day as payday.
  
  
• Employers in Australia pay salary and wages in a range of frequencies, such as weekly, fortnightly and monthly – and the super guarantee payments that correspond with that pay period will need to be made on the same day as the pay from 1 July 2026.
  
  
• Changes to the design of the SG charge will also be necessary to align with increased payment frequency. The Government will consult with relevant stakeholders on the design of these changes, with the final design to be considered as part of the 2024–25 Budget.

Proposed start date: 1 July 2026

The Government will provide $40.2 million to the Australian Taxation Office (ATO) in 2023–24. This includes: 

• $27.0 million for the ATO to improve data matching capabilities to identify and act on cases of SG underpayment by employers and $13.2 million for consultation and co-design. 

The Government will also set public targets for the ATO on recovering unpaid superannuation. The ATO will report annually against new measures set out in the Treasury Portfolio Budget Statement.

The ATO will receive additional funding over 4 years from 1 July 2023 to enable them to engage more effectively with employers to address the growth of tax and superannuation liabilities. 

The additional funding will facilitate ATO engagement with: 

• taxpayers who have high-value debts over $100,000 and


• aged debts older than two years where those taxpayers are either:
  
  
  
  • public and multinational groups with an aggregated turnover of greater than $10 million, or  
    
    
  • privately owned groups or individuals controlling over $5 million of net wealth. 

The Government estimates that these measures will result in $12.3 million in the payment of outstanding unpaid superannuation.

Although not announced as part of this year’s Federal Budget, it’s important for employers to note that the superannuation guarantee (SG) rate has increased to 11% from 1 July 2023.

The new SG rate applies to payments made to workers on or after 1 July 2023. This rate will increase by 0.5% each year until it reaches 12% in 2025.

Super guarantee percentage¹ 

Period	General super guarantee (%)
1 July 2023 – 30 June 2024	11%
1 July 2024 – 30 June 2025	11.5%
1 July 2025 – 30 June 2026	12%

Details can be found on the Australian Taxation Office website.

Start date: 1 July 2023