From July 1, 2025, Australian employers will be required to contribute 12% of their employees’ ordinary time earnings (OTE) into superannuation accounts. This marks the final step in a phased government initiative designed to strengthen retirement outcomes for Australian workers.
Whether you're an HR professional, a global business expanding into Australia, or a worker planning for the future, this increase is more than a percentage change—it represents a shift in the way Australia prepares for financial security in retirement.
(You can read our article about the 2024 increase made to Superannuation rates here.)
The Superannuation Guarantee is a legal obligation for Australian employers to contribute a percentage of employees’ earnings into retirement savings accounts. These funds are managed by superannuation providers and are meant to help workers build long-term financial security after they leave the workforce.
Introduced in 1992, the SG has become a core pillar of Australia’s retirement system—reducing reliance on the age pension and encouraging self-funded retirement.
The increase to 12% is part of a long-term policy plan by the Australian Government to improve national retirement outcomes. Incremental increases over the past several years have aimed to:
The increase means more retirement savings without reducing take-home pay. A higher SG rate contributes directly to an individual’s super balance, which grows over time through investment returns. For younger or long-term employees, this compounding effect can significantly impact their quality of life in retirement.
Employers must ensure their payroll systems are updated to reflect the new 12% rate starting 1 July 2025. The SG must be paid at least quarterly to an approved super fund.
Failure to comply may result in penalties, including the Superannuation Guarantee Charge (SGC), and potential reputational or financial risks. Businesses with contingent workers, international teams, or complex employment structures should consider consulting compliance specialists or partnering with an Employer of Record (EOR) like TCWGlobal.
While the 12% SG rate provides a stronger base, it is still important for employees to think beyond the minimum. Workers are encouraged to:
Employers can support this effort by offering education, tools, or additional benefits that encourage long-term financial wellness.
The 2025 Superannuation Guarantee increase to 12% represents a major milestone in Australia’s retirement system. It reflects a national effort to prepare for demographic shifts and ensure that Australians can retire with dignity and stability.
For workers, it means more savings and peace of mind.
For employers, it means acting now to stay compliant and support your workforce effectively.
If you have questions about the 2025 Superannuation increase or need help managing payroll compliance in Australia, TCWGlobal is here to help.
As your trusted Employer of Record, we handle the complexities of global workforce management—ensuring you meet all legal obligations while focusing on what you do best: growing your business.
Reach out to TCWGlobal today and let us guide you through Australia’s evolving employment landscape with confidence.