Super Goes to 12.5% from July 2026: What It Means for Your Pay and Retirement
The super guarantee rate increases from 12% to 12.5% on 1 July 2026 — plus Payday Super starts the same day. See how it affects your take-home pay, employer costs, and retirement savings.
Super guarantee increasing to 12.5% from 1 July 2026
The Superannuation Guarantee rate will increase from 12% to 12.5% on 1 July 2026. This is part of the legislated schedule under the Treasury Laws Amendment (Your Future, Your Super) Act 2021 and represents the final scheduled increase — the rate will reach 12.5% in 2026-27 and remain there unless Parliament legislates further changes. For an employee earning $80,000 per year, this means annual super contributions increase from $9,600 (12%) to $10,000 (12.5%) — an extra $400 per year going into your retirement savings. Over a 30-year career, this additional 0.5% can compound to tens of thousands of dollars in extra retirement savings.
Will it reduce your take-home pay?
Whether the SG increase reduces your take-home pay depends on how your salary is structured. If your employment contract specifies a base salary plus super (e.g., '$80,000 plus super'), your take-home pay stays the same — the employer absorbs the extra cost. If your contract specifies a total remuneration package inclusive of super (e.g., '$90,000 total package including super'), the higher super contribution means slightly less going to your base salary and therefore slightly less take-home pay. Check your employment contract or letter of offer. In practice, most employees on a base-plus-super structure will see no change to their take-home pay. Those on total-package arrangements may see a small reduction of approximately $400-500 per year for a $100,000 package.
Impact on employer costs
For employers, the 0.5% increase adds directly to employment costs for base-plus-super arrangements. For an employee on $80,000, the additional cost is $400 per year. For a business with 50 employees averaging $75,000, the total additional cost is approximately $18,750 per year. This increase coincides with Payday Super starting on the same date (1 July 2026), which changes super payment frequency from quarterly to each pay cycle. Employers should prepare by: updating payroll systems to calculate at 12.5%, adjusting budgets and cash flow projections, reviewing total-remuneration contracts, and ensuring payroll software is ready for Payday Super compliance. Use our Cost of Employment Calculator to model the impact on your specific workforce.
SG rate history and what comes next
The super guarantee has risen from 3% in 1992 to the current 12%, with 12.5% coming in July 2026. Key milestones: 3% (1992-93), 9% (2002-2025, with a long freeze), 10% (2021-22), 10.5% (2022-23), 11% (2023-24), 11.5% (2024-25), 12% (2025-26), and 12.5% from 2026-27. There is currently no legislated increase beyond 12.5%. Some industry groups and the Australian Institute of Superannuation Trustees have advocated for 15% as the long-term target, but this is not government policy. At 12.5%, Australia has one of the highest mandatory employer-funded retirement savings rates in the world, behind only a handful of countries. The combination of 12.5% SG and Payday Super represents the biggest structural change to Australia's superannuation system in decades.
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Official resources
General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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