The start of the 2025/2026 financial year has brought significant updates to superannuation rates and thresholds that employers, employees, and self-managed super fund (SMSF) members need to be aware of. These changes affect payroll obligations, contribution strategies, and retirement planning, making it essential to review your arrangements now to ensure compliance and maximise opportunities.
From 1 July 2025, the superannuation guarantee (SG) rate has increased to 12%, marking the final stage in the legislated gradual rise. At the same time, there are adjustments to contribution caps, total superannuation balance (TSB) limits, and several key super and tax thresholds.
Super Guarantee Rate Now 12%
Old rate: 11.5% (up to 30 June 2025)
New rate: 12% (from 1 July 2025)
The SG increase means employers must now contribute 12% of an employee’s ordinary time earnings (OTE) to their super fund. While the rise helps employees build stronger retirement savings, it may also impact employers’ cash flow, payroll accruals, and employment contracts—especially where remuneration packages are expressed as “inclusive of superannuation.”
Employer Checklist:
- Update payroll systems so SG is calculated correctly from the first pay run after 1 July 2025.
- Review employment agreements— if contracts are expressed as “inclusive of super,” an SG increase could reduce take-home pay unless contracts are renegotiated or the employer absorbs the cost.
- Plan for higher contributions in budgets and cash flow forecasts.
- Avoid penalties—late or incorrect SG payments can result in loss of tax deductions, interest charges, and administration fees.
Personal Superannuation Contributions
The annual concessional contribution cap remains at $30,000 for 2025/2026. The annual non-concessional contribution (NCC) cap stays at $120,000, which is four times the concessional cap.
While the NCC cap itself has not changed, individuals with a total super balance (TSB) of less than $2 million on 30 June 2025 can now make NCCs—provided they have not reached the age 75 deadline and any previous bring-forward periods are taken into account. This change is due to the upper TSB limit being linked to the general transfer balance cap (TBC), which has increased to $2 million.
NCC Cap and Bring-Forward Rules for 2025/2026:
| Total Super Balance at 30 June 2025 | NCC Cap | Bring-Forward Period |
| Less than $1.76m | $360,000 | 3 years |
| $1.76m to $1.88m | $240,000 | 2 years |
| $1.88m to $2.0m | $120,000 | No bring-forward |
| $2.0m and above | Nil | Nil |
Personal Deductible Contributions
Individuals may claim a tax deduction for personal super contributions made with after-tax funds if they meet eligibility criteria. Generally, a deduction is available if the member:
- Contributes to their fund in the relevant financial year;
- Is aged under 67, or aged 67–74 and meets the work test or exemption;
- Provides the fund with a valid Notice of Intent to Claim; and
- Receives an acknowledgment from the fund.
The official form for this notice is NAT 71121 – Notice of Intent to Claim or Vary a Deduction for Personal Super Contributions.
A notice will only be valid if:
- The person is still a member of the fund;
- The fund still holds the contribution;
- It has not been included in a previous notice;
- It is not part of a super income stream or released under the First Home Super Saver Scheme (FHSS); and
- It does not include recontributed FHSS amounts.
Key deadlines: The notice must be given by the earlier of:
- The date the individual lodges their income tax return for the relevant financial year; or
- 30 June of the following financial year.
If the member rolls over or withdraws their entire balance, or starts a pension before lodging the notice, the deduction claim will be invalid.
Updated Superannuation & Tax Thresholds for 2025/2026
| Threshold | 2024/2025 | 2025/2026 |
| General Transfer Balance Cap | $1,900,000 | $2,000,000 |
| Defined Benefit Income Cap | $118,750 | $125,000 |
| CGT Lifetime Cap | $1,780,000 | $1,865,000 |
| Untaxed Plan Cap – Lifetime | $1,780,000 | $1,865,000 |
| SG – Maximum Contributions Base (per quarter) | $65,070 | $62,500 |
| PCG 2016/5 Safe Harbour Rates (related party LRBA’s) | 9.35% | 8.95% |
Unchanged Thresholds for 2025/2026
- Concessional contribution cap: $30,000
- Non-concessional contribution cap (standard): $120,000
- Maximum bring-forward NCC cap (over 3 years): $360,000
- Division 293 annual income threshold: $250,000
What This Means for You
These changes represent an important opportunity to review your superannuation strategy:
- For employers: Ensure payroll systems are updated and contracts reviewed to comply with the SG increase.
- For employees and SMSF members: Consider contribution timing and whether you are eligible for bring-forward arrangements before your TSB reaches $2 million.
- For individuals making personal deductible contributions: Meet the strict notice deadlines to secure tax deductions.
The 2025/2026 updates are more than just compliance changes—they can directly influence retirement outcomes, tax planning, and cash flow.
If you’d like tailored advice on how these superannuation changes could affect you or your business, contact our team today. Our superannuation and tax specialists can help you maximise opportunities and remain compliant.
Pitt Martin Group is a CPA accounting firm, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.
Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Australian Society of Certified Practising Accountants (CPA), Australian Taxation Registered Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.
This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.
By Angela Abejo @ Pitt Martin Tax
