As we approach the new financial year, all business owners and employers need to be aware of a key change that will affect payroll and employee entitlements: the final scheduled increase to the Superannuation Guarantee (SG) rate.

🔺 What’s Changing?

From 1 July 2025, the Superannuation Guarantee rate will increase from 11.5% to 12%. This means that for every dollar of ordinary time earnings your employees receive, you’ll need to contribute 12 cents to their super fund.

This is the last step in the government’s phased plan to gradually raise the SG rate from 9.5% (in 2020) to 12% by 2025.

🧾 What Does This Mean for You?

If you’re an employer:

• Update your payroll systems: Ensure your accounting software or payroll provider is ready to apply the 12% rate from 1 July 2025. If KBAS processes your payruns we will take care of this step for you. If you process your own payruns and want us to review this change for you just reach out and we can action this on your behalf.
• Review employment contracts: If you offer “total remuneration” packages, the increase may affect take-home pay unless otherwise specified.
• Communicate with your team: Let your employees know about the increase—it’s a positive step toward their retirement savings.

If you’re a sole trader:

• While you’re not required to pay yourself super, this is a great reminder to consider making voluntary contributions to build your retirement savings.

📅 Timing Matters

The 12% rate applies to all salary and wages paid on or after 1 July 2025, even if the work was performed before that date. So, if your pay run falls in early July but covers work done in June, the new rate still applies.

💡 Tip from KBAS

This is a great time to:

• Whilst super accrues with each payrun it is not deductible until it’s paid. If you want to claim your super that has accrued and not yet been paid in the 2025 financial year, you have until June 20 to make this payment via Xero Super.
• Double-check your super payment schedule to avoid late payment penalties.
• Ensure your super clearing house is up to date with employee fund details.
• Budget for the increase in your payroll expenses, especially if you have a large team.

✅ We’re Here to Help

As your bookkeeper, we are here to make this transition smooth and stress-free. If you need help updating your payroll settings, reviewing your obligations, or communicating with your team, don’t hesitate to reach out.

Let’s keep your business compliant and your team’s future secure!