Critical Update: The superannuation guarantee rate has officially increased to 12% as of July 1, 2025, and today (July 28, 2025) marks the quarterly deadline for June quarter super payments. This final scheduled increase affects every Australian employer immediately.

As Australia's superannuation system reaches this milestone, employers must ensure full compliance with the new rate while meeting today's crucial payment deadline. Missing this deadline triggers the costly Super Guarantee Charge (SGC) that can significantly impact your business finances.

Understanding the 12% Superannuation Guarantee Rate

The increase to 12% represents the completion of a gradual rise that began in 2021, when the rate was 9.5%. This final step ensures Australian workers receive the maximum legislated super contributions to build their retirement savings.

Key Rate Timeline

July 1, 2021 – June 30, 2022: 10.00%
July 1, 2022 – June 30, 2023: 10.50%
July 1, 2023 – June 30, 2024: 11.00%
July 1, 2024 – June 30, 2025: 11.50%
July 1, 2025 onwards: 12.00% (final rate)

The 12% rate applies to all salary and wages paid to eligible workers on and after July 1, 2025, even if some or all of the pay period relates to work performed before July 1.

Today's Critical Deadline: July 28, 2025

Immediate Action Required: Super guarantee contributions for the April-June 2025 quarter are due today, July 28, 2025. This deadline applies to the 11.5% rate for that quarter, but employers must also prepare systems for the new 12% rate going forward.

Quarterly Payment Schedule

Quarter 1 (July-September): Due October 28
Quarter 2 (October-December): Due January 28
Quarter 3 (January-March): Due April 28
Quarter 4 (April-June): Due July 28 ⚠️ TODAY

Contributions are considered "paid" only when received by the super fund, not when transferred to a clearing house. Processing times vary, so ensure adequate time for fund receipt.

Who Must Receive Super Guarantee Contributions?

The 12% rate applies to all eligible employees, including:

Full-time, part-time, and casual employees
Workers aged 18 and over
Workers under 18 who work more than 30 hours per week
Some contractors (depending on arrangement specifics)

Calculation Base: Ordinary Time Earnings (OTE)

Super guarantee is calculated on ordinary time earnings, which includes:

Base salary and wages
Shift allowances and penalty rates
Overtime payments
Commissions and bonuses
Annual leave and sick leave payments

Excluses: Non-cash benefits, expense reimbursements, and certain fringe benefits.

Maximum Contribution Limits

For 2025-26, the maximum super contribution base is $62,500 per quarter. This means the maximum SG payment per employee per quarter is $7,500 (12% of $62,500).

Employers don't need to pay SG on earnings above this quarterly limit, providing some cost relief for high-income employees.

Immediate Impact on Business Costs

The increase from 11.5% to 12% represents a 0.5 percentage point rise that adds up quickly across your workforce.

Cost Impact Examples:

Employee earning $60,000: Additional $300 per year
Employee earning $80,000: Additional $400 per year
Employee earning $100,000: Additional $500 per year

For a business with 10 employees averaging $75,000 each, the annual increase is approximately $3,750 in additional super contributions.

Severe Penalties for Non-Compliance

Missing super payment deadlines triggers the Super Guarantee Charge (SGC), which includes:

SGC Components:

Super shortfall amount (the unpaid super)
10% annual interest (calculated from the start of the quarter)
$20 administration fee per employee, per quarter
Choice liability (up to $500 if paid to wrong fund)

Critical SGC Consequences:

Not tax deductible (unlike timely super payments)
Additional reporting requirements via SGC statement
Potential director penalty notices for repeated non-compliance
ATO audit risk and compliance scrutiny

Example SGC Calculation: For an employee earning $20,000 per quarter with missed super:

Super shortfall: $2,400 (12% of $20,000)
Interest (3 months): $60 (10% annual on $2,400)
Admin fee: $20
Total SGC: $2,480 (vs. $2,400 if paid on time)

Essential Compliance Actions for Employers

Immediate Steps (Due Today):

Pay June quarter super for all eligible employees by close of business today
Verify fund receipt through your clearing house or fund confirmation
Document payment evidence for compliance records

System Updates Required:

Update payroll software to apply 12% rate from July 1, 2025
Modify payroll templates and calculation formulas
Test new rate calculations before next pay run
Update employment contracts if they reference specific super rates

Budget Planning:

Recalculate annual payroll budgets to include increased super costs
Adjust cash flow projections for quarterly super payments
Review inclusive salary packages to ensure compliance without affecting take-home pay
Consider timing of salary reviews in context of increased super costs

Choice of Fund Obligations

With the 12% rate, ensuring contributions go to the correct fund becomes even more critical. Employers must:

Offer choice of fund to eligible employees within 28 days of commencement
Pay to nominated fund or default fund if no choice made
Maintain current choice records for ongoing compliance
Update fund details when employees change preferences

Paying to the wrong fund can trigger choice liability penalties within the SGC.

Record Keeping Requirements

Maintain comprehensive records for each employee including:

Payment dates and amounts for each quarter
Fund details and payment confirmations
OTE calculations and supporting documentation
Choice of fund forms and employee communications
Clearing house statements or fund receipts

Records must be kept for five years and be available for ATO review.

Technology and Clearing House Considerations

Payroll System Updates:

Ensure software can handle the 12% rate automatically
Test calculations with sample pay runs
Verify integration with your clearing house service
Update any custom spreadsheets or calculation tools

Clearing House Processing:

Understand your clearing house's processing timeframes
Account for processing delays when planning payments
Consider backup payment methods for urgent situations
Verify fund details are current and accurate

Managing Cash Flow Impact

The increase to 12% affects quarterly cash flow requirements. Consider:

Cash Flow Strategies:

Monthly super payments to spread the cost impact
Dedicated super reserve account to quarantine funds
Automatic transfers aligned with payroll cycles
Forward budgeting for increased quarterly payments

Small Business Considerations:

The increase applies equally to all employers regardless of size
Consider the timing of hiring decisions in context of increased costs
Review pricing strategies to account for increased employment costs
Explore payroll efficiency opportunities to offset cost increases

Special Situations and Edge Cases

Inclusive Salary Packages:

If your employment contracts specify "total remuneration including super," you may need to:

Recalculate base salaries to maintain net take-home pay
Update contract language for clarity
Communicate changes clearly to affected employees
Ensure compliance with minimum wage requirements

Part-Year Employees:

For employees starting or leaving during a quarter:

Calculate super on actual OTE paid during the quarter
Apply the rate applicable when wages are paid
Ensure pro-rata calculations are accurate
Maintain detailed records for partial quarter employees

Communication with Employees

Proactive communication about the SG increase demonstrates transparency and professionalism:

Key Messages:

Explain the increase to 12% and its timing
Clarify how it affects their retirement savings
Confirm their current choice of fund is up to date
Provide contact details for super-related questions

Communication Timing:

Send updates before the increase takes effect
Include information in next payslip communication
Update employee handbooks and onboarding materials
Consider team meetings or email updates for significant changes

Looking Ahead: Future Compliance Considerations

Upcoming Changes:

Payday super proposed from July 1, 2026 (requiring super payments with each pay, not quarterly)
Continued ATO focus on super compliance and enforcement
Potential further reforms to the super system

Preparation Strategies:

Stay informed about proposed payday super changes
Ensure robust systems can adapt to future requirements
Maintain strong compliance practices and record keeping
Consider professional advice for complex situations

Red Flags and Common Mistakes to Avoid

Critical Errors:

Applying old rates to post-July 1 payments
Missing processing time requirements for fund receipt
Incorrect OTE calculations including non-super items
Paying to incorrect funds or outdated fund details
Inadequate record keeping for compliance verification

Warning Signs:

Employee complaints about super payments
Unusual clearing house processing delays
Discrepancies in payroll system calculations
Missing fund confirmation receipts
Incomplete choice of fund documentation

When to Seek Professional Help

Consider professional assistance if you:

Have complex payroll arrangements or multiple award coverage
Employ contractors with unclear super obligations
Face cash flow challenges meeting increased super costs
Need help updating systems or processes for the new rate
Have missed previous deadlines and need SGC guidance

Ready to Optimize Your Financial Strategy?

Don't navigate the complex world of Australian tax and finance alone. Our experienced team at D & Y Practice is here to help you maximize your financial position while ensuring full compliance with ATO requirements.

Book a consultation today to discuss your specific circumstances and develop a tailored strategy that works for you.

Disclaimer: This information is general in nature and should not be considered as professional tax or financial advice. Tax laws and regulations can change, and individual circumstances vary. Always consult with a qualified accountant or tax professional before making financial decisions. The D & Y Practice accepts no liability for any loss or damage arising from reliance on this information.