What’s New from 1 July 2025: Key Tax and Financial Changes You Need to Know

Several important tax and financial updates came into effect on 1 July 2025. These changes will impact employees, employers, retirees, households, and students. Below is a breakdown of the most relevant changes and what they mean for you.

💼 Super Guarantee Increase to 12%

The Superannuation Guarantee rate has now increased from 11.5% to 12%. This means employers must contribute 12% of eligible employees’ ordinary time earnings into super funds. For workers, this is a welcome step toward building stronger retirement savings. Employers should ensure their payroll systems are updated to comply.

💰 Transfer Balance Cap Increases to $2 Million

The Transfer Balance Cap—which limits how much you can transfer into a tax-free retirement pension—has increased from $1.9 million to $2 million. This change provides more flexibility for retirees looking to maximise their tax-free retirement income. If you're nearing retirement, it's worth reviewing your super strategy in light of this change.

🏥 Updated Medicare Levy and Surcharge Thresholds

The Medicare Levy low-income thresholds have been raised to reflect wage growth and cost-of-living increases. From 1 July 2025:

• Singles earning below $101,000 (up from $97,000) will not pay the Medicare Levy Surcharge.

• Families now have a higher threshold of $202,000 (up from $194,000).

The surcharge only applies when you don’t have the appropriate level of private hospital cover.  These updates reduce the tax burden on lower- to middle-income Australians and may also improve eligibility for private health insurance rebates, especially if your income has dipped below the updated tier thresholds.

⚡ Energy Bill Relief Extended

To assist with ongoing cost-of-living pressures, the Energy Bill Relief Fund has been extended from 1 July 2025, offering up to $150 in electricity bill credits for households:

• $75 in Q1 (July–September)

• $75 in Q2 (October–December)

These rebates are automatically applied to eligible households and many small businesses through electricity providers—no application needed. Combined with last year’s support, this brings total government energy relief to nearly $450 over 18 months.

👷 Minimum Wage Increase

The National Minimum Wage has risen by 3.5%:

• New hourly rate: $24.95 (up from $24.10)

• Weekly minimum (based on 38 hours): $948.00

This change supports more than 2.6 million workers, including those covered by award rates. It applies to the first full pay period starting on or after 1 July 2025. Employers should ensure payslips reflect this increase and review any award-linked arrangements.

🎓 Higher Student Loan Repayment Threshold

If you have a HELP, HECS, or other government student loan, the repayment threshold has increased to $54,435 (previously $51,550). This means you won’t start repaying your loan until your income reaches this new level, providing some breathing room for lower-earning graduates.

👋 Need Help Navigating These Changes?

Whether you're an individual, employer, or nearing retirement, these updates could impact your tax planning, payroll setup, or financial strategy.

If you need further information, please contact your Client Manager.