5 big super changes kicking in from July: Everything you need to know

Big changes are coming to superannuation, and aside from one tax change, it's all good news.

Australians will get paid their super faster, have the option to contribute more of their pre-tax income to their super balances, and will get paid super on top of paid government parental leave.

1. Payday super

Right now, employers can pay super to their employees every 3 months. From next month, they have to pay it along with your pay.

There are penalties if your super doesn't hit your account within 7 business days of pay day.

There are two benefits to this change:

• Your super gets invested earlier. While it won't make a massive difference to your overall super balance at retirement, it's always better to have money paid today than in three months' time.
• It's easier to keep track of your super. Getting super paid along with your salary means you'll know when it gets paid. It makes it easier to keep track, prompts you to review your fund's performance and makes it much harder for businesses to avoid paying super.

2. Higher contribution caps

Australians can contribute up to $30,000 to their super each financial year. This is called the concessional contribution cap. Any money you contribute up to this limit is taxed at a low rate of 15%.

It's a great way to build retirement wealth and pay less tax. From 1 July this year the cap increases to $32,500, letting everyone contribute just a little more with a tax saving on top.

3. Super on paid parental leave

In another win, anyone on paid government parental leave will now get super paid on their leave. This fixes an obvious imbalance that contributes to the gender super gap.

Paid parental leave is currently 120 days, but this will increase to 130 days from 1 July. So more paid leave, plus paid super on top.

Paid super on parental leave applies to parents with babies born from 1 July 2025.

4. The Division 296 tax on large super balances

Now for some less positive news. Division 296 is a tax that applies to super balances over $3 million from July this year.

Basically, if your balance exceeds $3 million (which, first of all, congratulations on your comfortable retirement), you'll pay a 15% tax. But only on the proportion of earnings that exceeds the $3 million threshold.

So you're not getting taxed on the whole balance. You're getting taxed on the earnings in your super fund for every dollar that exceeds $3 million.

Let's say you have $3.2 million in super and your fund earns a 6% return in the next financial year.

That's $192,000 (again, congratulations). Only $200,000 of your balance exceeds the threshold, which is 6.25% of your total balance.

6.25% of your $192,000 investment return is $12,000. This is the proportion of earnings that's taxed at 15%, which leaves you with an extra tax bill of $1,800.

5. Increase to the income thresholds for government co-contributions

Low income earners can get a government co-contribution to their super. It's pretty simple, if you earn below the minimum threshold (currently $47,488) and add at least $1,000 to your super, the government will throw in an extra $500.

From 1 July 2026 the lower income threshold increases slightly to $49,293, benefiting more Australians.

Do I need to do anything from 1 July?

There's nothing you need to do when these changes come into effect. But it's always a good idea to make sure your employer is paying your super correctly. Payday super makes this even easier to check.

And everyone should regularly check their super.

1. Make sure you're getting a good return. Look at the fees your fund charges and compare them to other, similar funds. The lower the better. Also look at fund performance, in particular the 10-year performance. If you're in a balanced fund that has a 10-year performance of 6%, but you see other balanced funds returning 7%, 8% or more over the same time then you might want to switch.
2. Consider changing your super investments. Most Australians have a default fund with a balanced investment option. If you're in your 20s, 30s or even 40s you have many years before retirement, meaning a higher risk, higher growth option is worth considering.