As of 1 July 2025, several significant changes have come into effect that directly impact Australian business owners. From wage increases to superannuation obligations and parental leave enhancements, these updates affect payroll, cash flow, and compliance requirements.
Below is a summary of the key changes now in effect:
1. National Minimum Wage Increase: The Fair Work Commission has increased the national minimum wage by 3.5%.
- New rate: $948.00 per week or $24.95 per hour
- Applies from the first full pay period on or after 1 July 2025
- Minimum Award wages have also increased by 3.5%
Action: Review all pay rates, especially for employees on minimum or award wages, and update payroll accordingly.
2. Superannuation Guarantee Rate Now 12%: The Superannuation Guarantee (SG) rate has reached its final legislated increase.
- New rate: 12% of ordinary time earnings (up from 11.5%)
- Applies to all eligible employees from 1 July 2025
Action: Ensure payroll systems are updated and total remuneration packages are reviewed if they include superannuation.
3. Proposed $20,000 Instant Asset Write-Off: The government has proposed a continuation of the small business instant asset write-off.
- Threshold: $20,000
- For businesses with turnover under $10 million
- Applies to eligible assets first used or installed between 1 July 2025 and 30 June 2026.
Action: Plan major asset purchases carefully and check eligibility for the deduction once legislation is confirmed.
4. Paid Parental Leave Extended to 24 Weeks with Superannuation Contributions: From 1 July 2025, the Paid Parental Leave (PPL) scheme has been enhanced.
- Duration: Increased to 24 weeks (120 days)
- Superannuation: A 12% superannuation contribution will be paid on government-funded PPL, administered by the ATO as a lump sum after the financial year ends
- Applies to children born or adopted on or after 1 July 2025
Action: Update payroll procedures to accommodate these changes.
5. Increased ATO Compliance and Reporting: The ATO continues its focus on digital reporting and data matching.
- Single Touch Payroll (STP) remains mandatory
- Some small businesses have now been shifted to monthly GST reporting
- Expect tighter review of lodgements and late payments
Action: Keep bookkeeping systems current and accurate, and ensure reporting is lodged on time.
6. Stronger Penalties for Underpayments and Record Issues: There is heightened scrutiny on wage underpayments and employment record-keeping under Fair Work laws.
Action: Conduct internal checks to ensure payroll classifications, hours, and entitlements are correctly recorded.
Let’s make 2025–26 a confident and compliant year for your business…