Payday super legislation saving 6.2 billion in unpaid super a year
The Albanese Labor government has passed legislation requiring employers to pay superannuation at the same time as wages, starting 1 July 2026.
Industrial Relations
Term 2
The Treasury Laws Amendment (Payday Superannuation) Bill 2025 passed Parliament on 4 November 2025 and received Royal Assent on 6 November 2025. From 1 July 2026, employers must deposit superannuation contributions into employee accounts within seven business days of payday, replacing the current quarterly payment system. The reform addresses a significant compliance problem: the ATO estimates around $6.2 billion worth of superannuation went unpaid in 2022-23. Unpaid super disproportionately affects women, those in casual or insecure work, and lower-income workers. Around one in four Australian workers currently miss out on their super entitlements.
The legislation benefits retirement incomes through more frequent contributions that compound over time. For an average 25-year-old worker, this equates to an additional $6,000 in today's dollars by retirement. For workers who have experienced unpaid super, the impact is more substantial. In a typical case involving a 35-year-old, recovering unpaid super results in a retirement balance more than $30,000 higher in today's dollars. The ATO will implement a risk-based compliance approach during the first 12 months, differentiating between low-risk employers (those making genuine efforts to pay on time) and high-risk employers. Employers who fail to meet the seven-day deadline will be liable for the superannuation guarantee charge, which includes the shortfall amount, daily interest, and an enforcement charge of up to 60 per cent of the shortfall.
Key Points
From 1 July 2026, employers must pay super within seven business days of payday or face the superannuation guarantee charge (including up to 60% penalty)
The ATO estimates around $6.2 billion in super went unpaid in 2022-23, affecting one in four workers
Average 25-year-old workers will receive the equivalent of an extra $6,000 in today's dollars by retirement through earlier compounding
[1] https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/payday-superannuation
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