Superannuation rule changes from July 2025 (and previous years)

Australia’s super system always seems to be changing. This 1 July brings a previously scheduled increase to the superannuation guarantee rate and a rise in the transfer balance cap as well as the welcome introduction of super payments on the government’s paid parental leave scheme.

A new tax on the investment earnings of balances above $3 million is a less popular reform.

Prior years have also brought significant tweaks, making it difficult to keep track of our complex super system.

If all the recent changes and reforms have left you wondering what it all means for your super and retirement plans, here’s a quick guide to the key legislative changes and when they commenced.

Super rule changes starting 1 July 2025

Increase in Super Guarantee percentage

On 1 July 2025, the percentage rate for the Super Guarantee (SG) increased from 11.5% to 12%. Employers are required to contribute additional money into their employees’ super accounts in line with the higher SG percentage rate.

Super on paid parental leave

For births and adoptions that occur on or after 1 July 2025, the government will pay a 12% super contribution on top of payments you receive from the government paid parental leave scheme.

Tax on earnings of balances above $3 million

From 1 July 2025, people with a total super balance of $3 million or more at the end of the financial year will pay additional tax. The tax is calculated as 15% of the portion of the earnings for the year that relate to the balance above $3 million and is called Division 296 tax.

At the time of writing, Division 296 tax has not yet been legislated, but is expected to pass parliament unopposed. If passed, the first application of the new tax will apply for earnings from 1 July 2025 to 30 June 2026.

Indexation of the Transfer balance cap (TBC)

The Transfer balance cap puts a limit on the amount of super that can be transferred into tax-free retirement pensions. On 1 July 2025 the cap increased from $1.9 million to $2 million. If you transferred super into the retirement phase before 1 July 2025, your personal transfer balance cap is different.

Non-concessional contribution cap and bring-forward rule

The indexation of the Transfer balance cap has flow-on effects for individuals with a high total super balance (TSB).

If your TSB is equal to or higher than the transfer balance cap on 30 June, your non-concessional contribution cap for the following financial year is zero.

Similarly, if your TSB is within two times the non-concessional contribution cap of the transfer balance cap the operation of the bring-forward rule is modified. The bring-forward rule allows you to contribute more than the non-concessional cap in one year by ‘bringing forward’ the cap from future years.

The increase to the transfer balance cap means people who could not make non-concessional contributions in prior years may be able to do so in 2025–26, and access to the bring-forward arrangement may also change.

The table below shows how indexation affects the operation of the bring-forward rule for higher balances.

TSB on 30 June 2024	TSB on 30 June 2025	Bring forward available in the following year
<$1.66 million	<$1.76 million	3 years – $360,000
$1.66 million to <$1.78 million	$1.76 million to < $1.88 million	2 years – $240,000
$1.78 million to <$1.9 million	$1.88 million to <$2 million	None – standard $120,000 cap
$1.9 million or more	$2 million or more	N/A – cap is zero