Legislation would require employers to pay employees' super at same time as salary and wages
The Australian government is seeking feedback on its plan to require employers to pay super on payday which aims to address the problem of unpaid super in the country.
Financial Services Minister Stephen Jones said on Friday that the government is releasing the draft legislation, with submissions accepted until April 11.
Under the proposal, employers will be required to pay their employees' super at the same time as their salary and wages starting July 1, 2026.
"Payday super will make it easier for employers to manage their payroll by paying super at the same time as salary and wages," Jones said in a statement. "The new law will also streamline the way super is paid by employers to make it easier to meet their obligations."
According to the minister, the reform will see a 25-year-old median income earner be around $6,000 or 1.5% better off at retirement.
The reforms will also see a redesign of the Superannuation Guarantee, which will ensure that workers are fully compensated for any delay in receiving their super.
Employers will also be required to promptly rectify any unpaid superannuation, with escalating penalties for delayed, larger, or repeated failures to make payments.
"This change will strengthen Australia's superannuation system and help deliver a more dignified retirement to more Australian workers, in line with the objective of super," Jones said.
The proposed reform comes as millions of Australians are missing out on their full superannuation entitlements.
Analysis from the Super Members Council (SMC) last year revealed that a staggering $5.1 billion in unpaid superannuation was reported within a single year.
Misha Schubert, CEO of SMC, said the government's proposed payday super laws will make the system "fairer for both workers and businesses."
"Paying super on payday will modernise the super system to stem underpayments for workers. This urgently needed reform will be fairer for both workers and employers," Schubert said in a statement.
"Unpaid super leaves people poorer when they retire – and a unified push is needed to fix it."
Meanwhile, the Australian Council of Trade Unions (ACTU) said the payday super will directly improve the retirement outcome for workers.
"Payday super is critical to improving workers' retirement outcomes and stopping super theft," said ACTU assistant secretary Joseph Mitchell in a statement. "By making super paid at the same time as wages, workers will retire with thousands of dollars more in their superannuation accounts."
