The passage of new legislation that requires superannuation to be paid alongside workers’ pay cycles will result in employees retiring with tens of thousands more in their super funds. 

The Albanese government’s so-called “payday super” legislation has been described as a “gamechanger” to the financial futures of millions of Australians. It has been welcomed by key stakeholders in the field, including unions and superannuation funds. 

What was happening before payday super? 

Prior to the implementation of payday super, employers were only required to pay super at least four times a year.  

For employers, this led to calculation errors and difficulty in keeping track of the correct amounts across their payroll. For employees, the lack of synchronicity with their regular pay cycles resulted in uncertainty around whether the correct amount of superannuation was being paid.  

What is super theft? 

Super theft occurs when there is an underpayment or non-payment of an employee’s mandatory superannuation entitlement by their employer. The Super Members’ Council (SMC) estimated that in 2022-2023, 3.3 million Australia’s missed out on $5.7 billion in superannuation – an average of $1730 per person. 

The impact was especially notable for women, young workers, migrant workers, and those in low-income or insecure jobs.  

So, what changes with payday super? 

From 1 July 2026, employers will be required to make superannuation contributions on pay day.  

This will make super theft more visible to employees and ensure workers benefit from compound interest sooner. 

SMC analysis showed that, with super being paid more frequently and compound interest beginning sooner, the average worker could be banking an additional $7,700 in retirement savings. 

SMC CEO Misha Schubert welcomed the legislation’s passage as a benefit for working Australians. 

“This is an historic day which will make a huge difference to help 3.3 million Australians retire with more income to cover the cost of living,” Schubert said. 

“The passage of payday super laws will help ensure every dollar owed to millions of workers makes it into their super account on time and in full.” 

Australian Council of Trade Unions (ACTU) Assistant Secretary Joseph Mitchell also lauded the incoming changes.  

“Payday super means millions of workers will retire with tens of thousands of dollars more in superannuation, not just by reducing super theft, but by earning faster and more compound interest from their super,” Mitchell added.