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From 1 July 2026, employers will have to pay superannuation at the same time as wages, a move expected to boost retirement savings and curb billions lost to unpaid super each year.
Australian Unions have welcomed the passage of the Albanese Government’s payday super legislation through Parliament, describing it as a significant win for workers in the fight against superannuation theft.
Under the new law, which takes effect from 1 July 2026, employers will be required to pay superannuation at about the same time as their salary or wages, specifically, within seven business days of payday. This aims to make unpaid super more visible and ensure workers benefit from compound interest earlier, resulting in greater retirement savings over time.
"Super", as superannuation is known in Australia, is the national retirement savings and investment system, where employers contribute a portion of an employee's wages into a retirement fund.
The Hon Dr Daniel Mulino MP, Assistant Treasurer, Minister for Financial Services, noted that employees will hereon benefit from more frequent and earlier super contributions that will grow and compound over their working life.
He gave an example: "For the average 25-year-old worker’s retirement balance, this is the equivalent of receiving an extra $6,000 in today’s dollars.
"If a worker is missing out on their super the impact is even more significant. In a typical unpaid super case for a 35-year-old, recovering their super leaves their retirement balance more than $30,000 better off in today’s dollars."
Further, Dr Mulino clarified that the Australian Taxation Office (ATO) is consulting on its approach to compliance for the 12 months after the change starts. The ATO’s approach will differentiate between low and high-risk employers. This approach will mean that employers who are making the effort to pay contributions in line with each pay cycle can fall into the low-risk category.
According to Australian Unions, super theft currently strips 5.7bn Australian dollars from 3.3mn workers each year, disproportionately affecting young workers, women, migrant workers, and those in insecure jobs.
Research by the Super Members’ Council shows that nearly one in three workers (31%) in their 20s and 28% in their 30s have experienced unpaid super.
Joseph Mitchell, Assistant Secretart, ACTU said: “Payday super means millions of workers will retire with tens of thousands of dollars more in superannuation, not just by reducing super theft, but by earning faster and more compound interest from their super.”
“This is a reform which will help those who suffer from super theft the most: young people, migrants, women and those in insecure work.”
TL;DR: How Australia's new legislation will ensure that employers are paying out superannuation due to employees on time
The new law will:
- Require employers to ensure super contributions are received by the employee’s fund within seven business days of payday, or they will be liable for the superannuation guarantee charge.
- Help the Australian Taxation Office enforce the law and more quickly identify employers not making contributions.
- Redesign the superannuation guarantee charge to be fit for purpose and make Payday Super work.
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