Source: The Conversation (Au and NZ)
From July 1 this year, all Australian businesses will have to pay their employees’ superannuation on the same day as they pay salaries. If you’re an employee, that means your employer’s super payment will need to reach your super fund within seven days of pay day.
In the lead up to the change, the Australian Taxation Office has been encouraging employers to transition to “payday super” early. So you may have already noticed a change. Underpayment or failure to pay superannuation has become a growing problem.
The tax office recently said around A billion in superannuation is currently unpaid to workers. So what’s changing from July 1? How much is it likely to boost your super balance over time? And where can you get help if you need it, either as an employer or an employee?
What’s new from July 1? In Australia, all employees receive a minimum amount of superannuation on their wages paid into their nominated super fund. This is called the superannuation guarantee and is 12% of your wages (whether you’re full-time, part-time or casual).
Under the current rules, ending on June 30, most businesses pay superannuation quarterly. That money has to reach an individual employee’s super fund 28 days after the end of the relevant quarter. Although some businesses may have paid super more regularly, until now many individuals may have seen only quarterly deposits to their super fund.
This means it can be difficult for an employee to match the super on their payslip with the deposits into their fund. There are often delays between an employer making the payment and a super fund processing the payment.
Payday super is a new step to ensure payments are actually made to the super fund at the same time as they’re reported to the tax office. Thousands more for a typical worker over time If the main difference from July 1 is the timing when an employer pays super, does this make any difference for the employee?
Yes, it will. Even an employee without underpaid or unpaid super will benefit from more regular payments of super to their super fund. This is because earlier and more frequent payments will help super investments and returns grow faster.
Estimates vary of how much it could be worth over time. Last year, the federal government said it could add around ,000 in today’s dollars to average 25-year-old worker’s retirement balance. The Super Members Council – which represents superannuation funds with 12 million Australian members – separately estimated a typical worker could be ,400 better off in retirement if super was paid at the same time as wages.
Why was any change needed? Super Members Council analysis found younger Australians on lower wages, people in insecure work, lower-paid women, and migrant workers were particularly hard hit by lost super. One in two workers who earn less than ,000 a year have unpaid super.
A 2022 report by the federal government’s Australian National Audit Office showed workers in construction, retail, professional scientific and technical services, accommodation and food services were the most likely to have unpaid super. And very small and small businesses were the most likely to have underpaid their staff super.
But larger corporations have been caught out too. Just last year, supermarket giants Woolworths and Coles were found to have underpaid wages for about 28,000 staff, with an estimated final bill that could reach billion. Those underpayments included underpaid superannuation.
All too often, individuals only realised their super was unpaid, or underpaid, after it was too late, such as if their employer unexpectedly went bankrupt. That’s the key problem the new payday super rules aim to prevent.
How employers can get help If you’re an employer, payday super is a significant change to how you might have done business in the past. Super for employees can no longer be considered as a problem for down the track – and this will have cashflow implications.
If you haven’t already, there is still time to get prepared using these tax office checklists and videos for employers. Last week, the tax office said more than half of employers were still not paying super more frequently than quarterly.
But it’s also made it clear it will focus on education over punishment for employers trying to do the right thing in the coming financial year. How employees can get help While payday super is certainly a win for employees, unfortunately there will always be a minority of employers that deliberately or accidentally do the wrong thing.
If you’re an employee, especially if you have any reason for concern, follow these three quick steps: make sure your employer has your current super details understand where your super goes and regularly check your super fund balance against your payslip.
Communicate any errors to your employer in writing as soon as you can. Then you’ll have peace of mind the payday super rules are working for you.
There’s more easy-to-read information for employees on the tax office website.
Toni Patricia Brackin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Original source: https://analysis1.mil-osi.com/2026/06/01/payday-super-is-coming-on-july-1-workers-will-be-thousands-of-dollars-better-off-long-term/