Tax Planning
Super Funds and New Concessions: How the Changes to Superannuation for Balances Above A$3 Million Will Affect You
Australia has new legislation coming 1 July 2025 that'll reduce tax concessions on earnings in super funds with large balances. If you’re a high-balance member, make sure you understand what’s changing.
By NomadicTax Research Team • 5-8 min read • November 22, 2025
## What’s Changing and Why It Matters
From **1 July 2025**, for superannuation members with balances **above A$3 million**, earnings on those balances will be taxed at a concessional rate of **30%**, rather than enjoying more favourable tax treatment like others.([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai)) This measure, known as the *Better Targeted Superannuation Concessions*, was announced on **28 February 2023** and passed through legislation; however, some regulatory details and rate applications continue to be developed.([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai)) It aims to ensure fairness in tax concessions, limiting the benefit provided to very large super balances.([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation?utm_source=openai))
## Who Is Affected
- Members whose **total super balance exceeds A$3 million** as of the new measures. Earnings above that threshold will be taxed at **30%**.([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai))
- Those below will remain on the previous structure for concessional tax rates on their super earnings. No changes for them initially.([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai))
## Practical Examples
- **Emma**, has **A$4 million** in super: the earnings on the **first A$3 million** continue under the prior reduced rates, but anything earned on the extra **A$1 million and above** will be taxed at **30%** starting 1 July 2025.
- **Liam**, with A$2.9 million, won’t feel an impact immediately—his balance remains below the threshold.
## Opportunities & Strategies Before the Change
- For those nearing the A$3 million mark, consider whether any cap arrangements, non-concessional contribution planning, or rollover strategies could settle balances before the threshold date. Make sure you consult your financial super fund and advisers—timing matters here.
- Conversely, if you expect to breach the threshold soon, understanding the new tax on earnings will help you model whether maintaining or reducing your balance makes sense.
## Compliance and Tax Filing Implications
- Super funds must accordingly implement the legislative change, ensuring they can track earnings above the threshold separately. Any software or provider supporting accounting and reporting should prepare now.([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai))
- Individual taxpayers should review their annual statement and earnings allocation, and be alert to any unexpected tax withholdings or notices.
## What to Do Now
1. Contact your **super fund** and ask if they are ready for the change in how earnings above A$3 million will be treated.
2. Review your **total super balance** as of now—if you're close to or already above A$3 million, consider financial advice.
3. Plan for cashflow: because a higher tax rate will apply on earnings, there may be less net growth in that segment of your balance.
4. Stay updated via **ATO updates** and your super fund notices for guidance and legislative instruments that finalise how the measure will operate in practice.
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**Bottom line**: If your super balance is large—or might become large—you need to understand the Better Targeted Superannuation Concessions. They’re designed to affect high balances, and becoming informed now gives you more options for planning.