Did you know Australia’s average weekly earnings and inflation figures have triggered several key changes to superannuation thresholds starting 1 July 2025?
For anyone managing super contributions, understanding these updates is critical — whether you are an employee, sole trader, or employer.
This blog will help individuals and businesses stay compliant and plan smarter when lodging a tax return in Melbourne, or anywhere across the country.
What Are Super Contribution Caps?
Super contribution caps limit how much you can add to your super each year without extra taxes.
Concessional contributions, like employer or salary-sacrificed amounts, and non-concessional contributions, made from after-tax income, have separate caps.
Exceeding these triggers penalties from the Australian Taxation Office (ATO).
A sole trader accountant ensures your contributions align with these limits, optimising your Business Tax Returns.
Key Changes To Superannuation Caps From 1 July 2025
The Australian Bureau of Statistics recently released figures for average weekly ordinary time earnings (AWOTE) and consumer price index (CPI) for the quarter ending December 2024.
These important economic indicators determine the superannuation rates and thresholds that will apply from 1 July 2025. Here’s what you need to know about the upcoming changes.
Transfer Balance Cap Increase
The transfer balance cap limits the amount of superannuation that can be transferred into the tax-free pension phase. From 1 July 2025, this cap will increase from $1.9 million to $2.0 million.
This represents a significant opportunity for those approaching retirement to potentially move more assets into a tax-advantaged environment.
Total Super Balance Threshold
The total super balance threshold, which affects eligibility for various contribution types, will also increase to $2 million from 1 July 2025.
This threshold is particularly important as it determines your ability to make non-concessional contributions, receive spouse contributions, and qualify for government co-contributions.
While the contribution caps themselves aren’t changing for 2025-26, the total super balance thresholds that determine eligibility for non-concessional contributions will be adjusted.
Superannuation Guarantee Rate Increase
While not subject to indexation, the superannuation guarantee rate will increase from 11.5% to 12% from 1 July 2025. This represents the final increase in the scheduled series of superannuation guarantee increases that began several years ago.
For employees, this means employers will be contributing more to your superannuation, potentially requiring adjustments to personal contribution strategies.
Strategic Opportunities Before 30 June 2025
The period leading up to 30 June 2025 presents several strategic opportunities that savvy investors should consider. If you’re looking to maximise your contributions before the end of the financial year, consulting with Tax Experts in Australia is highly recommended.
Catch-up Concessional Contributions
Individuals with a total super balance below $500,000 as of 30 June 2024 can access unused concessional contribution caps from the previous five financial years.
Importantly, the 2024-25 financial year represents the last opportunity to utilise any unused caps from 2019-20. These catch-up contributions could provide significant tax advantages for eligible individuals.
With careful planning, eligible individuals could potentially contribute up to $167,500 in concessional contributions in the 2025-26 financial year. This includes the standard $30,000 cap plus up to $137,500 in carried forward caps from previous years.
Non-concessional Contribution Planning
The timing of non-concessional contributions can significantly impact your ability to contribute.
If you’re considering making substantial non-concessional contributions, understanding how the bring-forward rules interact with the increasing total super balance thresholds is crucial.
How Do These Changes Affect Different Individuals?
The impact of these changes varies significantly depending on your personal circumstances.
Those approaching retirement with substantial superannuation balances will benefit from the increased transfer balance cap, while younger individuals might focus more on the superannuation guarantee increase and maximising concessional contributions.
For small business owners and self-employed individuals, the unchanged concessional contribution cap continues to provide valuable tax planning opportunities.
Sole trader accountants often recommend maximising these contributions as an effective tax minimisation strategy.
Individuals looking to lodge tax returns online should ensure they correctly report any personal superannuation contributions for which they intend to claim a tax deduction.
Failure to properly notify your superannuation fund or incorrectly claiming deductions can result in unexpected tax liabilities.
Planning For 2025-26
From 1 July 2025, monitor contributions closely. Adjust salary sacrifice to account for the 12% super guarantee. Review super balances annually to confirm eligibility for contributions.
Use carry-forward or bring-forward rules strategically if under thresholds. Accountants provide ongoing support, ensuring your Business Tax Returns reflect optimal super planning.
The 2025 super contribution caps bring changes and opportunities. The transfer balance cap rises to $2.0 million, and the super guarantee rate hits 12%, but concessional and non-concessional caps remain at $30,000 and $120,000.
Exceeding caps incurs harsh penalties, while carry-forward and bring-forward rules offer savings if planned correctly. Employers must ensure payroll compliance to protect employees.
Maximise Your Super With Leading Tax Experts
Worried about navigating the 2025 super contribution caps for your tax return in Melbourne?
Leading Tax Experts have trusted accountants in Australia, to simplify it all. Our Tax Accountant Services deliver expert advice to maximise refunds and ensure compliance.
With affordable solutions and offices in Melbourne, Caroline Springs, Geelong, and more, booking is easy. Call 1300 583 829 or email info@ltetax.com to secure your Business Tax Returns today!
