Superannuation Changes: What High-Income Earners and Employers Need to Know
Most employers are familiar with the minimum superannuation guarantee (SG) contribution they must make—11.5% this year, rising to 12% from 1 July 2025. But are you aware of the maximum employer super contribution limit?
This limit, known as the maximum super contributions base, caps the amount of earnings an employer is required to contribute super for.
How Does the Maximum Super Contributions Base Work?
For the 2024–2025 financial year, the maximum super contributions base is $65,070 per quarter.
🔹 Example: ABC Hospital pays the super guarantee of 11.5%. Because of the cap, ABC does not have to contribute more than $7,483.05 per quarter for a high-income doctor—even if that doctor earns more than $260,280 annually ($65,070 per quarter).
Past and Future Super Contribution Limits
The maximum super contributions base typically increases each year in line with Average Weekly Ordinary Time Earnings (AWOTE).
📊 Recent maximum contributions base figures:
✅ 2024–2025: $65,070
✅ 2023–2024: $62,270
✅ 2022–2023: $60,220
✅ 2021–2022: $58,920
However, for the 2025–2026 financial year, the cap will decrease for the first time—dropping to $62,500 from 1 July 2025.
Why Is the Maximum Contributions Base Decreasing?
AWOTE data suggested that the maximum contributions base would increase to $68,060 on 1 July 2025. However, changes to super laws in 2017 introduced a mechanism to ensure that a single employer does not contribute more than the concessional contributions cap for an employee.
For 2025–2026, this cap has been triggered for the first time.
🔹 If the cap had increased to $68,060, the required super guarantee contributions would have exceeded $30,000 per year, surpassing the concessional contributions cap of $30,000 and potentially triggering tax issues for employees.
🔹 By reducing the cap to $62,500, employers will not be required to contribute more than $30,000 per year, preventing excess concessional contributions tax issues for employees.
What Should Employers & High-Income Employees Do?
🔹 Employers: From 1 July 2025, when the 12% SG rate begins, review your payroll systems to ensure you are using the new, lower maximum contributions base. This ensures you don’t pay more than required and avoid creating an excess concessional contributions tax liability for your employees.
🔹 High-Income Employees: Check that your employer is not contributing more than the cap on your behalf. Exceeding the concessional contributions cap could result in an excess concessional contributions tax assessment at the end of the financial year.
For expert advice and assistance in dealing with your Business Employment Taxes in Australia, please contact Mathews Tax Lawyers on 1800 685 829
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.