Payday Super Changes

Posted 28 Jun '23

Government introduces "payday super"

The Government has announced that, from 1 July 2026, employers will be required to pay their employees’ superannuation at the same time as their salary and wages.

This "payday super" reform is expected to benefit the retirement incomes of millions of Australians, make employers’ payroll management smoother (with fewer liabilities building up on their books), and make it easier for employees to keep track of their payments (and harder for them to be exploited by disreputable employers).

What does this mean for business owners?

If you're paying a 25-year-old median income earner's superannuation quarterly and their wages fortnightly, the move to payday super could help that employee be around $6,000, or 1.5 per cent, better off by the time they retire. This isn’t just good news for them, it's also great for your business as it contributes positively to your employee's financial wellbeing and can help boost overall job satisfaction.

This new system aims to make your payroll management more efficient. By having more frequent super payments, you'll have fewer liabilities piling up in your records, making your financial management less complicated.

This policy shift isn't only about financial benefits and smoother administration; it's also about transparency and protection. By paying super on payday, it will be easier for your team to track their super payments, and harder for unscrupulous businesses to take advantage of them. Those in lower paid, casual and insecure work often miss out on benefits when super is paid less frequently. Notably, women, who are overrepresented in these types of jobs, are set to benefit significantly from this change.

The Australian Taxation Office (ATO) has flagged that an alarming $3.4 billion worth of super went unpaid in the 2019–20 financial year. In response, the ATO is being equipped with additional resources to identify unpaid super payments earlier. Also, the Government is setting higher recovery targets for the ATO, reinforcing the importance of complying with superannuation payment responsibilities.

In the coming months, expect the Treasury and the ATO to reach out for consultations with businesses and stakeholders to help navigate these changes. The rollout date of 1 July 2026 has been decided to provide sufficient time for employers, superannuation funds, payroll providers and other parts of the superannuation system to prepare and adapt to this significant change.

What changes does your business need to make for payday super?

Employers have until July 2026 to start paying employees super with their pay cycle. For businesses already operating under this system, no change is required. For those who need to make the adjustment, you can do so at any time before the 2026 cut-off. Making the change as soon as possible will help position your business as an employer of choice.

For more information, visit the Australian Government website.

At Trinity Advisory, we specialise in tax accounting, advisory services, and business coaching for small businesses located in and around Cairns (116 Mulgrave Road, Parramatta Park QLD 4870) and the Sunshine Coast (2/8 Maroochydore Road, Maroochydore QLD 4558).

Should you need any taxation or accounting advice for your business, get in touch with Trinity Advisory today. Our team of expert Business Accountants, Advisors and Coaches are here to help!

Ref: Treasurer's media release, 2 May 2023


Subscribe to our Newsletter

First Name
Last Name
E-mail Address