As the superannuation guarantee (SG) increase approaches on July 1, CPA Australia is advising workers to assess how this change will affect their finances and retirement savings. The rise from 11.5% to 12% in the minimum contribution by employers to their employees’ superannuation funds is expected to have a significant impact.
Richard Webb, CPA superannuation lead, highlighted the potential long-term benefits of the increase, emphasizing that even small annual increments could accumulate substantially over time. However, workers are urged to confirm if their employer will cover the additional contribution or if it will impact their total remuneration package.
Robyn Jacobson, senior advocate at The Tax Institute, explained that the increased SG rate applies to earnings from July 1, 2025, regardless of when the work was performed. Employers can deduct contributions in the 2024–25 financial year if paid by June 30, 2025.
Webb stressed the importance of reviewing employment contracts, particularly for those on total remuneration packages that include super. For individuals under award or enterprise agreements, the change is unlikely to affect take-home pay.
With the SG increase marking the culmination of a gradual process initiated in 2012, Australians are encouraged to take control of their superannuation to ensure adequate savings for retirement. Additionally, the inclusion of superannuation payments in the government’s Parental Leave Pay scheme from July 1 further emphasizes the need for robust retirement planning.
While the industry welcomes the SG increase, Webb noted that individuals should consider additional contributions to maximize their retirement savings. Seeking advice from financial advisors on investment and insurance options within super funds is recommended to optimize financial outcomes.
Despite the positive impact of the SG increase, some industry experts express frustration over the delays in implementing this necessary change. Nevertheless, the impending rise in minimum super contributions serves as a reminder for Australians to prioritize their financial future and take proactive steps towards securing a comfortable retirement.
As the deadline for the SG increase approaches, workers are urged to engage with their employers to understand how the change will affect them personally. By staying informed and proactive, individuals can make informed decisions to enhance their financial well-being and ensure a secure retirement.
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