What Employers & Business Owners Must Know From 1 July 2025
A wave of legislative, financial and compliance updates hit Australian businesses from 1 July 2025, and employers who aren’t prepared risk falling behind. These changes span superannuation, wages, payroll systems, taxation, HR policies and state-based thresholds, and will affect organisations of all sizes.
This blog breaks down the most critical updates, including what’s changing, when it takes effect, and how it will impact your business operations. Whether you manage payroll in-house or support a flexible workforce, now is the time to review your systems and ensure you’re ready. Read on to learn what’s changing from 1 July 2025 and how to stay ahead of your obligations.
Top Actions for Employers from 1 July 2025
| Action Item | Description |
| Update payroll systems | Ensure payroll software reflects the 12% super guarantee and updated income tax rates. |
| Adjust for minimum wage rise | Apply the new $24.95/hour minimum wage and ~$35/hour casual rate. Check for award updates affecting specific roles and industries. |
| Review contracts and thresholds | Confirm compliance with the high-income threshold increase to $175,000 and update contracts as needed. |
| Plan asset purchases | Take advantage of the $20,000 instant asset write-off before it reverts to $1,000 on 1 July. |
| Prepare workplace policies | Implement a process to support Right to Disconnect laws and align visa offers with the new $76,515 TSMIT. |
Superannuation Changes
Super Guarantee Increase
From 1 July 2025, the Super Guarantee rate increases from 11.5% to 12%. This applies to all salary and wage payments made on or after that date, even if the pay period started before 1 July. Employers must adjust their payroll systems in advance to ensure accurate contributions.
Payday Super Reform – Coming 2026
The Payday Super reform, confirmed to begin 1 July 2026, will require super to be paid each payday, not quarterly. This means businesses must now be ready to transition to more frequent contribution schedules. While the reform takes effect from July 2026, businesses should begin preparing now by reviewing their payroll processes and superannuation scheduling.
Contribution Caps (No Change)
The contribution caps remain unchanged:
- Concessional (pre-tax): $30,000
- Non-concessional (post-tax): $120,000
Transfer Balance Cap
The Transfer Balance Cap, which limits how much can be transferred into the tax-free super pension phase, has increased from $1.9 million to $2.0 million as of 1 July 2025.
Parental Leave Pay Superannuation
As of 1 July 2025, the government has included superannuation contributions as part of Paid Parental Leave. This reform will improve retirement savings outcomes for parents, and the government will pay directly into their nominated fund.
Minimum Wage Increase
The national minimum wage increases by 3.5% from 1 July 2025, bringing the base rate to $24.95 per hour or $948 per week. This amounts to $35.00 per hour for casual workers, including a 25% loading. Employers should also check for changes to relevant Modern Awards that may apply to specific industries.
High-Income Threshold Adjustment
The high-income threshold will rise to $175,000. This impacts:
- Unfair dismissal eligibility: Employees earning above this threshold and not covered by an award or enterprise agreement may be excluded.
- Contractor vs employee status: This amount is also relevant when workers opt out of certain Fair Work protections.
Taxation & Payroll Changes
Personal Income Tax Cuts
From 1 July 2025, the income tax rate on earnings between $18,201 and $45,000 was reduced from 16% to 15%. Employers must ensure their payroll software is updated to apply the correct tax tables from the start of the financial year.
General Interest Charges No Longer Deductible
Businesses can no longer claim a tax deduction for General Interest Charges (GIC) on unpaid tax debts. With the ATO’s GIC currently at 11.17%, compounding daily, this change increases the financial impact of late payments. Timely lodgement and payment of tax obligations will become more critical than ever.
Single Touch Payroll Reminder
Quarter 4 Single Touch Payroll (STP) submissions were due by 14 July 2025. Employers should ensure all data submitted is complete, correct and timely to avoid penalties.
Superannuation Contribution Deadline
Reminder: Quarter 4 super contributions must be paid by 28 July 2025 to avoid penalties. This applies to all eligible employers and remains a critical compliance deadline.
Business Expenses & Incentives
Instant Asset Write-Off Threshold Reduction
The instant asset write-off threshold returns to $1,000 per asset from 1 July 2025. The current $20,000 limit is available only until 30 June 2025. Businesses planning asset purchases should act before the deadline.
Business Vehicle Depreciation Cap
The car depreciation cost limit increases to $69,674 for vehicles used for business purposes from 1 July 2025.
Bonus Energy Efficiency Deduction (Final Year)
Until 30 June 2025, eligible businesses with a turnover under $50 million can claim a 20% bonus deduction (up to $20,000) for eligible energy-efficient equipment upgrades. This incentive is not available beyond this date.
Regulatory & Compliance Updates
Company Fee Increases
ASIC will increase its fees from 1 July 2025:
- Company registration: $611 (up from $597)
- Annual proprietary review: $329 (up from $321)
ACCC Merger Reforms
From 1 January 2026, mandatory ACCC approval will be required for mergers above defined thresholds. A voluntary filing system opened on 1 July 2025 to help businesses prepare.
State-Based Payroll & Land Tax Changes
Payroll Tax Thresholds
- Victoria: Threshold increases from $900,000 to $1 million. Tapering begins for businesses with wage bills over $3 million nationally.
- Northern Territory: Threshold rises from $1.5 million to $2.5 million, with tapering beginning at $5 million.
NSW Land Tax
From 1 January 2025, NSW land tax thresholds are fixed at:
- General threshold: $1,075,000
- Premium threshold: $6,571,000
Final Reminders for Employers
482 Visa Changes
From 1 July 2025, the Temporary Skilled Migration Income Threshold (TSMIT) increases to $76,515, excluding super. Employers must continue conducting labour market testing and ensure offers align with the new minimum.
Right to Disconnect Laws
From 26 August 2025, employees covered by awards or enterprise agreements will have the legal right to disconnect from after-hours work communications. SMEs with affected staff must implement suitable policies and procedures.
Energy Bill Rebate for Small Businesses
Eligible small businesses will receive a $150 electricity bill rebate, paid in two $75 instalments from July to December 2025. To qualify, businesses must:
- Have an active ABN.
- Be named on the electricity bill.
- Use less than 100 MWh per year.
NSW Battery Rebate
The NSW Government offers up to $1,500 for installing batteries connected to a Virtual Power Plant. This is in addition to the federal solar rebate, which aims to lower costs and increase energy independence.
Conclusion
The newly effective reforms are not minor updates. They are structural shifts that affect how you pay your people, manage benefits, claim tax incentives and meet legal obligations. Delays in preparation may result in non-compliance or penalties.
Reviewing your payroll processes, employment contracts, superannuation contributions, and HR policies is critical. Whether expanding across Australia or supporting a global contractor workforce, small business owners and employers must stay compliant and operational through every regulatory change.
SDP Solutions Can Streamline Your Employment and Compliance Needs
If you are unsure whether your systems are prepared for the changes, now is the time to review. From payroll tax rates and onboarding procedures to contractor engagement and parental leave superannuation, SDP Solutions can help you align with the new obligations.
We partner with organisations of all sizes to deliver contractor onboarding, payrolling and compliance at scale, backed by KPI-driven service and dedicated account management. Speak with SDP Solutions today to streamline your Employer of Record needs and stay on top of compliance.
