🧾 🇦🇺 AU FY25–26 new tax year updates: SG, thresholds, ETP and redundancy caps

🔴⚠️ CRITICAL: Do Not Run Payroll Until Your Account Is Updated ⚠️🔴

Update scheduled for: Tuesday, 25 June 2025 (subject to change at short notice)

DO NOT INITIATE ANY PAY RUN WITH A PAY DATE OF 1 JULY 2025 OR LATER UNTIL YOUR ACCOUNT HAS BEEN UPDATED!

How You'll Know Your Account Is Ready

• Check that the automatic changes listed below are visible in your system
• Contact support if you're unsure whether your account has been updated

What This Article Covers

• Pre-update preparation - actions to take before the update
• What's changed automatically - system updates requiring no action from you
• Required manual actions - changes you must make after the update
• How the update works
• Troubleshooting - common questions and issues

🔧 Pre-Update Preparation

Document current settings

• Note employees with custom SG rates (not 11.5%)
• Note employees with custom quarterly caps (not $65,070)
• Record any inactive custom payroll roles

Review upcoming pay runs

• Identify any pay runs scheduled for 1 July 2025 or later
• Plan to delay these until after account update

What's Been Updated & What's New

Applied to active employee records using default settings as of the update date

✅ Superannuation Guarantee (SG)

• Increased from 11.5% to 12%

✅ Quarterly Maximum Super Contribution Base

• Reduced from $65,070 to $62,500 per quarter

✅ Study and Training Support Loans (STSL)

• New FY25–26 thresholds added per ATO guidance

ℹ️ Paid Parental Leave (PPL)

• This applies to Services Australia Payments and does not impact payroll (See ATO for guidance)

ℹ️ Lump Sum E Reporting threshold removed

• ⏰ Lump Sum E reporting threshold removed for new financial year - no payroll system impact

  >>> Reminder that the Lump Sum E threshold is being removed, and any back payments older than 12 months must be reported as a Lump Sum E, even if it's only $5.

✅ ETP and Redundancy Thresholds

• Updated to FY25–26 ATO thresholds for ETP (Life & Death Benefit), Genuine Redundancy, and Approved Early Retirement Scheme

⚠️ Critical: These thresholds are reference values only and are not automatically enforced by the system. When processing these payments, you must manually select the appropriate sub-type codes and calculate the correct amounts based on current ATO guidelines and each employee's specific entitlement.

📋 Required Manual Actions (Complete After Update)

1. Update Employees with Custom SG Settings

Who needs this: Employees who had custom SG rates or caps before the update

How to identify them:

1. Go to Employees → Click Saved Searches
2. Click Add to create a new search
3. Set up search criteria for employees who still need manual updates:
   • Superannuation Rate ≠ 12% OR
   • Super Contribution → Quarterly Threshold ≠ 62500
4. Click Save & Run to see results
5. Review the results table - look for:
   • Employer Super Contribution column showing rates other than 12%
   • Quarterly Upper Super Threshold column showing amounts other than $62,500

Action: For each employee in the results, click Edit and manually update their SG rate to 12% and quarterly threshold to $62,500 where appropriate for your business requirements

2. Check Reactivated Employees

Who needs this: Any employee reactivated after being terminated

Why: Terminated employee records were excluded from automatic updates and retain their previous settings

Action: Manually check and update their SG settings if they should use the new FY25–26 rates

3. Review ETP and Redundancy Payments

When processing these payments:

• Manually apply correct sub-type codes
• Calculate amounts according to FY25–26 ATO limits
• System will not enforce these limits automatically

4. Review Payroll Role Access

Check if this affects you: You're using the Administrator role for payroll access, or you previously had custom payroll roles set as inactive

What to check:

1. Go to Setup → Users/Roles → Manage Roles
2. Edit the relevant role and confirm the Payroll Centre tab is enabled
3. If you had custom payroll roles that were previously inactive, re-mark them as inactive

Why this matters: Role configurations may have been reset during the update process

🧾 Automatic Superannuation Update – FY25–26

✅ What you need to know

If your business uses the default Superannuation Guarantee (SG) rates, the new values will apply automatically in the new financial year:

🛠️ How the update works

There are two mechanisms that apply the update to employee records:

1. Scripted Update:
   A scheduled script runs during the first week of July to automatically update employee records that had the default values with the new default super values.
2. Pay Run Trigger:
   The update will also occur when you run your first pay run dated in July and click Process Payslips. This action applies the new values to employees who use the system defaults.

⚠️ Note: Before a July-dated pay run is processed, you may still see the old values on employee records. This is expected and not a cause for concern.

⚠️ Important Notes

• Complete manual actions just before your first 2025/26 pay run in July
• Contact support if you're unsure whether updates have been applied
• Double-check calculations before submitting your first pay run of the new financial year

❓ Frequently Asked Questions

Q: How will I know my account has been updated?
A: Check that the automatic changes listed in this article are visible in your system when ypu run your first July dated pay run. Contact support if you're unsure.

Q: Why didn't my executive's SG rate change to 12%?
A: It's likely custom-configured to stay under their annual super cap. We don't override manual settings.

Q: I reactivated an employee and their SG rate is still 11.5% – is this a bug?
A: No. Their record wasn't updated because they were marked as terminated during the system update.

Q: Have ETP and redundancy caps been updated too?
A: Yes – both have been updated based on the ATO's published thresholds for FY25–26.

Q: What if the update date changes?
A: We'll notify you of any schedule changes. Continue to avoid running payroll with dates from 1 July 2025 until the update is complete.

💬 Need Help?

Read about 🇦🇺 Finalizing Your Australian Financial Year (STP)
Reach out to our support team.