The Albanese Government has introduced new legislation to make sure superannuation is paid on payday, a move the Treasurer Jim Chalmers says will strengthen Australia’s retirement system and help workers retire with more.
The change means employers will have to pay their employees’ super at the same time as their salary and wages, with the new rule taking effect from 1 July 2026.
“This legislation is all about reforming our superannuation system to help ensure more Australians get the secure retirement they need and deserve,” Treasurer Chalmers said. “Our government is ensuring more Australians earn more, keep more of what they earn and retire with more too.”
Assistant Treasurer and Minister for Financial Services Daniel Mulino said the reform would make a practical difference for millions of workers whose retirement funds will now grow faster. “Employees will benefit from more frequent and earlier super contributions that will grow and compound over their working life,” he said.
According to Treasury estimates, the change could add about $6,000 in today’s dollars to the retirement balance of a typical 25-year-old worker. For those who have previously missed out on super, the benefit is even greater. “In a typical unpaid super case for a 35-year-old, recovering their super leaves their retirement balance more than $30,000 better off in today’s dollars,” the release noted.
While most employers are doing the right thing, the Australian Taxation Office (ATO) has estimated that $5.2 billion in super went unpaid in the most recent financial year data. The government says those in lower-paid, casual or insecure jobs — who are more likely to be women — are most at risk of missing out.
Under the proposed law, employers will be required to make sure super contributions are received by the employee’s fund within seven business days of payday, or face a superannuation guarantee charge. The ATO will also get stronger powers to enforce compliance and identify employers who fall short.
The government plans to redesign the superannuation guarantee charge to make it fit for purpose under the new payday system. The ATO has said it will consult on its approach to compliance in the first year after the change begins, distinguishing between low- and high-risk employers. Those who are making the effort to pay in line with each pay cycle will be considered low-risk.
The Treasurer thanked stakeholders for their support in shaping the reform. “We thank the unions, industry, businesses and the broader community for their feedback, engagement and views on this legislation,” he said.
The government says the new payday super rule will close long-standing gaps in the system, giving workers confidence that the money they earn today will be there for them tomorrow.
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