The Federal Government has introduced a bill to Parliament to change the way superannuation is paid.
If passed, the bill will require employers to pay super at the same time as their regular pay cycle.
Currently, it only has to be paid once a quarter.
Here’s what you need to know.
Super
Superannuation is money set aside for retirement from your pay. Every Australian employer must make super contributions on behalf of their staff.
Currently, employers are required to pay super every three months, which can make it harder to track missed payments.
The Australian Taxation Office (ATO) estimates $5.2 billion worth of super was not paid in the most recent financial year.
Bill
Under the bill, employers would need to process superannuation payments alongside payroll, typically fortnightly or monthly depending on their pay cycle.
They will have seven days business from each pay run to ensure that a super payment is also deposited into their employee’s nominated account.
Treasurer Jim Chalmers said the bill will help the ATO “more quickly identify employers not making contributions.”
Penalties
The bill includes penalties for late or missed payments.
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Employers who miss the seven-day deadline would face a potential fine that includes
- The missed super payment
- Daily interest
- An additional enforcement charge
In this system, if an employer owed you $220 in super and paid it three months late, they would also pay interest for those three months, plus an extra penalty.
Industry support
Super Members Council CEO Misha Schubert supported the bill, saying workers could earn more by retirement, because super generates interest.
The Australian Council of Trade Unions (ACTU) called on the Government to “urgently pass this commonsense legislation”.
ACTU Assistant Secretary Joseph Mitchell said: “Payday super is critical to stopping super theft. [It] affects younger workers more which makes payday super an intergenerational inequality issue”.
Concerns
Accounting body CPA Australia backed the reforms.
However, it also noted small business may face “cashflow challenges,” saying they may “lack the resources and technological proficiency to adapt swiftly.”
The bill is now before Parliament. If passed, it would come into effect on 1 July 2026.
