Australia’s Super Guarantee (SG) rate reached its legislated maximum of 12% on 1 July 2025. After more than a decade of staged increases, employer superannuation contributions are now capped at this level — unless parliament legislates further changes. Here’s what you need to know about the current rate, the full history, and what it means for your retirement savings and tax planning.
What is the Super Guarantee?
The Super Guarantee is the minimum percentage of your ordinary time earnings that your employer must contribute to your nominated superannuation fund. It applies to most employees aged 18 or over (and those under 18 who work more than 30 hours per week), and is paid at least quarterly.
The SG rate is set by legislation and has been increasing gradually since it was introduced at 3% in 1992. The 12% rate from 1 July 2025 represents the completion of a schedule legislated under the Superannuation Guarantee (Administration) Act 1992.
SG rate history — all years
| Financial Year | SG Rate |
|---|---|
| 2025–26 onwards | 12.00% |
| 2024–25 | 11.50% |
| 2023–24 | 11.00% |
| 2022–23 | 10.50% |
| 2021–22 | 10.00% |
| 2020–21 | 9.50% |
| 2014–15 to 2019–20 | 9.50% (paused) |
| 2013–14 | 9.25% |
| 2002–03 to 2012–13 | 9.00% |
| 1999–2002 | 8.00% |
| 1998–99 | 7.00% |
| 1996–97 to 1997–98 | 6.00% |
| 1995–96 | 5.00% |
| 1992–93 to 1994–95 | 3.00–4.00% |
The rate was paused at 9.5% for six years (2014–15 to 2019–20) before the staged increases to 12% resumed.
What the 12% milestone means for you
Your take-home pay may be affected
If your employment contract specifies a “package” figure (total cost to employer including super), the SG increase flows through automatically — which means your take-home pay effectively decreases slightly as more of your package is redirected to super. If your salary is expressed as a base figure plus super on top, the increase does not reduce your take-home pay.
Check your employment contract or payslip to confirm which arrangement applies to you.
The concessional contributions cap
SG contributions count toward your concessional contributions cap, which is currently $30,000 per financial year (2025–26). This cap also covers:
- Salary sacrifice contributions
- Personal (tax-deductible) contributions under s290-180 of ITAA 1997
- Employer-paid life and TPD insurance premiums inside super
If your employer’s SG contributions are increasing, you need to recalculate how much room you have left under the cap for salary sacrifice or personal deductible contributions. For a person earning $200,000, SG at 12% equals $24,000 — leaving only $6,000 in cap space for other concessional contributions.
If you exceed the concessional cap, the excess is included in your assessable income and taxed at marginal rates (with a 15% tax offset to reflect contributions tax already paid). Our superannuation advisers can help you optimise your contributions strategy before year end.
Maximum Superannuation Contribution Base
The Maximum Superannuation Contribution Base (MSCB) is the quarterly earnings level above which an employer is not required to pay SG contributions. For 2025–26, the MSCB is $62,500 per quarter ($250,000 per annum).
At 12%, SG on $250,000 equals exactly $30,000 — the concessional contributions cap. This is no coincidence; the MSCB was recalibrated when the rate reached 12% so that the maximum SG liability aligns precisely with the cap.
If you earn above $250,000 per year, your employer’s SG obligation is capped at $30,000 regardless of your actual earnings. Additional super contributions above this level are entirely voluntary.
What employees should do now
1. Check your contract type. Determine whether your salary is expressed as a base-plus-super or total package arrangement. If the latter, consider whether renegotiation is warranted.
2. Review your salary sacrifice arrangements. If you’re salary sacrificing to maximise the concessional cap, recalculate your optimal sacrifice amount given the higher employer SG. Over-sacrificing beyond $30,000 will trigger excess concessional contributions tax. Speak with our financial planning team to get this right.
3. Run a retirement projection. The SG increase adds meaningful compounding value over time. Use the MoneySmart superannuation calculator or speak with a financial planner to model your projected balance at retirement under the new rate.
4. Consider catch-up contributions. If you have a super balance below $500,000, you may be eligible to carry forward unused concessional cap amounts from prior years (up to five years). This can allow larger contributions in a given year — useful for those who had career breaks or lower earnings periods.
5. Check your fund’s investment options. Now is a good time to review whether your fund’s default investment option continues to suit your age, risk tolerance, and retirement timeline. Members of a self-managed super fund have greater flexibility to tailor this mix.
What employers need to know
- SG must be paid to a complying super fund (or a Retirement Savings Account) at least quarterly.
- Payments must reach the fund by the 28th day after the end of each quarter (i.e., 28 October, 28 January, 28 April, 28 July).
- Failure to pay on time, or underpayment, triggers the Superannuation Guarantee Charge (SGC) — which is not deductible and attracts penalties.
- Review your payroll software to ensure the correct 12% rate is applied from 1 July 2025.
- Employees earning under $450 per month are no longer exempt from SG (this exemption was removed from 1 July 2022). All eligible employees must receive SG regardless of earnings.
Our business advisory team can help employers review payroll obligations and ensure compliance.
When SG may not be payable
SG does not apply to all payments. Ordinary time earnings (OTE) does not include:
- Overtime payments
- Certain allowances (e.g., shift allowance for work beyond ordinary hours)
- Leave loading in some circumstances
- Contractor payments where the arrangement is genuinely a contractor relationship (though the ATO applies a substance-over-form test)
Employers and employees should review the ATO’s OTE guidance to ensure correct calculation.
Frequently asked questions
What is the current Super Guarantee rate in Australia? The current Super Guarantee rate is 12%, effective from 1 July 2025. This is the legislated maximum and is not scheduled to increase further.
What was the Super Guarantee rate in 2024–25? The SG rate for the 2024–25 financial year (1 July 2024 to 30 June 2025) was 11.5%.
Will the Super Guarantee rate increase beyond 12%? There is no legislated increase beyond 12%. Any future change would require new legislation.
Does the SG rate affect my salary sacrifice? Yes. SG contributions and salary sacrifice contributions both count toward the $30,000 concessional contributions cap. If your employer’s SG increases, your available salary sacrifice capacity decreases accordingly.
What is the Super Guarantee rate for contractors? Genuine contractors are generally not entitled to SG. However, if you are engaged primarily for your labour (rather than providing a result), the ATO may treat you as an employee for SG purposes regardless of the contract structure.
If you need help reviewing your salary sacrifice strategy, super fund choice, or retirement projection in light of the SG increase to 12%, contact the AGS Financial Group team. Our financial planners and accountants work together to ensure your super strategy is fully integrated with your broader tax and investment planning.