The government has recently announced a new requirement for employers to pay their employees’ superannuation (super) at the same time as their salary and wages, starting from July 1, 2026. This change, known as payday super, aims to address the issue of unpaid super and provide employees with better protection.
Currently, employers are only required to pay super for eligible employees on a quarterly basis. This means that employees often realise they haven’t received the correct amount of super until it’s too late. The responsibility to chase up unpaid super falls on the employee, and many unscrupulous employers take advantage of this by either abandoning or liquidating their business, leaving employees with nothing.
The new payday super system will make it easier for employees to keep track of their super payments, reducing the opportunity for employers to exploit this loophole. It will also benefit employers by streamlining their payroll management and reducing long-term liabilities.
The government estimates that a 25-year-old median income earner who currently receives super quarterly and wages fortnightly could be around $6,000 or 1.5% better off at retirement with this change alone.
To support the implementation of payday super, the Australian Taxation Office (ATO) will receive additional resources to detect unpaid super payments earlier. The ATO will also have enhanced targets for recovering unpaid super.
It’s important to note that the legislation related to these measures has not yet been released or passed in Parliament. However, considering the broad political support for these proposals, it is likely that they will be introduced once the consultation process concludes, which is expected to begin in the second half of 2023.