Federal Treasury releases more information about Payday Super

The Federal Treasury recently released a Payday Super Fact Sheet outlining proposed changes to align super payments with wages.

In the 2023-24 Federal Budget, the Government announced a proposed reform to the payment of Superannuation Guarantee (SG) contributions.

According to the proposal, from 1 July 2026, your employer has to pay your SG contributions on ‘payday,’ i.e. at the same time you get paid your salary and wages (weekly, fortnightly, monthly, etc.), instead of the current quarterly requirement.

The recently released Payday Super Fact Sheet provides further implementation details about this proposal and goes on to state that “these reforms will deter superannuation theft and enable the ATO [Australian Taxation Office] to take quick action to rectify instances of unpaid superannuation.”

The fact sheet details what would happen if employers failed to pay contributions in full and on time, what is being done to support employers to make this transition, and the ATO’s increased visibility of SG contributions.

This change is meant to address the issue of unpaid super and to improve retirement outcomes for Australians, who will benefit from having their super paid earlier and more frequently—and therefore invested earlier and more frequently. It’s also about better visibility and fairness, since more frequent super payments are likely to put SG payments more front of mind for most Australians.

According to the Association of Superannuation Funds of Australia (ASFA), “the earlier super is paid, the longer the money remains invested. In real terms, a 25-year-old median income earner receiving quarterly super payments will be $6,000 better off in retirement just through receiving fortnightly payments.”

Note: Legislative amendments for Payday Super are to be introduced into Parliament before the end 2024.