From July 1, 2025, Australians will experience a wave of major financial changes impacting their superannuation, tax rules, Centrelink payments, wages, and energy costs.
These updates coincide with the start of the new financial year, bringing with them critical implications for budgeting, benefits, and future savings.
Whether you’re an employee, parent, retiree, or small business owner, understanding these updates can help you make informed financial decisions. Here’s a detailed guide on what to expect.
Superannuation Contributions Set to Increase
Mandatory employer superannuation contributions will increase from 11.5% to 12% starting July 1. This marks the final legislated increase, wrapping up the 0.5% annual rise implemented since 2021.
- For a worker earning $100,000/year, this means an additional $500/year added to their super fund.
- Over a 30-year career, this could boost retirement savings by more than $47,000.
Other key changes:
- Transfer Balance Cap increases from $1.9 million to $2 million.
- Maximum Super Contribution Base drops from $65,070 to $62,500.
Key Superannuation Changes from July 1
| Change | Previous | New (From July 1) |
|---|---|---|
| Employer Super Contribution Rate | 11.5% | 12% |
| Transfer Balance Cap | $1.9 million | $2 million |
| Max Super Contribution Base | $65,070 | $62,500 |
National Minimum Wage Increased to $24.90/hour
Starting July 1, the minimum wage in Australia will rise by 3.5%:
- From $24.10/hour → $24.90/hour
- Weekly wage: $948/week for a 38-hour week
- Annually: around $49,296/year
This increase aims to provide an economically sustainable boost to low-income workers while accounting for rising inflation.
Paid Parental Leave Boosted to 24 Weeks
Parents will welcome a two-week increase in Paid Parental Leave (PPL):
- From 110 days (22 weeks) to 120 days (24 weeks)
- Applies to babies born on or after July 1, 2025
- Superannuation contributions (12%) will now be paid on PPL for the first time
This update supports working families, especially new mothers, in building long-term retirement savings while caring for a newborn.
New Tax Rule: No Deductions for Tax Debt Interest
One of the biggest tax changes taking effect is the removal of tax deductions for overdue tax interest:
- The General Interest Charge (GIC) and Shortfall Interest Charge (SIC) will no longer be tax-deductible
- Expected to increase government revenue by $500 million by 2026–27
This means businesses and individuals must be extra vigilant about paying tax bills on time to avoid non-deductible charges.
Centrelink Payments & Thresholds Adjusted
Starting July 1, millions of Australians will receive modest increases to their Centrelink benefits due to indexation:
- Family Tax Benefit A & B
- Multiple Birth Allowance
- Newborn Supplement
Increases range from $4.48 to $48, benefiting 2.4 million Australians.
Asset and income thresholds for Age Pension, Disability Support Pension, and Carer Payment will also be raised.
Electricity Costs Rise, But Rebates Offered
While many Australians will see their power bills increase, some relief is on the way:
- AGL price hikes:
- NSW: +13.5%
- SA: +7.8%
- QLD: +7.5%
- VIC: +6.8%
- NSW residents could pay up to $300 more annually based on average usage.
- The government will offer a $150 electricity rebate, distributed as two $75 payments during the second half of 2025.
Medicare Levy Surcharge Thresholds Increased
The Medicare Levy Surcharge (MLS) thresholds are increasing for high-income earners without private hospital insurance:
- Singles:
- From $97,000 → $101,000
- Families:
- From $194,000 → $202,000
Failing to hold private health insurance above these income levels may result in an additional 1–1.5% tax charge.
Key July 1 Changes for Aussies
| Category | Update |
|---|---|
| Super Contribution Rate | From 11.5% to 12% |
| Minimum Wage | From $24.10/hour to $24.90/hour |
| Paid Parental Leave | From 22 to 24 weeks + 12% super paid on PPL |
| Tax Interest Deductions | Removed for overdue GIC & SIC |
| Centrelink Payments | Indexed up to $48, thresholds increased |
| Electricity Bills | Price hikes up to 13.5%, but $150 rebate for relief |
| Medicare Surcharge | Thresholds raised to $101,000 (single) and $202,000 (family) |
The start of the 2025–26 financial year brings a wave of impactful updates for all Australians. Whether it’s the super boost, higher wages, extended parental leave, or tax and Centrelink adjustments, staying informed is key to making smart money moves.
Make sure to review your personal financial plan, update your super contributions, check Centrelink eligibility, and manage your taxes before the new rules take full effect.
FAQs
When will the superannuation increase take effect?
The employer contribution rate will officially rise from 11.5% to 12% on July 1, 2025.
Who is eligible for the Paid Parental Leave increase?
Parents with babies born on or after July 1, 2025 are eligible for 24 weeks of PPL and 12% super on payments.
How can I avoid the Medicare Levy Surcharge?
To avoid the MLS, ensure you have private hospital insurance if your income exceeds $101,000 (single) or $202,000 (family).