Employers will be required to pay super contributions on payday starting July 2026
In a major shake up of superannuation contributions, employers will be required to pay their employees' super at the same time as their salary and wages, under changes passed by Federal Parliament.
The new rules will take effect from July 1, 2026, according to Treasurer Jim Chalmers.
"This will strengthen Australia's superannuation system and help deliver a more secure retirement to more Australian workers," he said in a statement.
"Employees will benefit from more frequent and earlier super contributions that will grow and compound over their working life."
Under the new law, it will be mandatory for employers to ensure that 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. It will also:
- Help the Australian Taxation Office (ATO) 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.
Addressing super shortfall
The new law aims to address the billions of super entitlements missed out on by millions of Australians because of unpaid super.
In 2022-23, 3.3 million Australians missed out on $5.7 billion in unpaid super. This means, on average, an affected worker missed out on $1,730.
The Super Members Council welcomed the "historic passage" of the payday super laws.
"The passage of payday super laws will help ensure every dollar owed to millions of workers makes it into their super account on time and in full," said SMC CEO Misha Schubert in a statement.
"Payday super will also help to deliver an average of $7,700 more for working Australians by retirement, because being paid your super sooner helps to grow your investment returns faster."
Payday super concerns
The passing of the legislation comes despite previous calls to postpone the start date of the payday super mandate by two years amid the new logistical demands on the superannuation transmission network.
There were also calls to the government seeking an introduction of a grace period to allow employers to receive education and support without immediate penalties for non-compliance.
According to the Federal government, the ATO will be consulting on its approach to compliance for the 12 months after the change starts.
