Payday super was first announced more than two years ago and will see super paid in line with salary and wages, rather than the current quarterly requirement. (Source: NewsWire\/Getty) <\/p>\n
Australian workers will receive their superannuation<\/a> at the same time as their salary and wages from next year, after the government\u2019s payday super legislation<\/a> passed parliament. The change will come into effect from July 1, 2026 and is set to quietly boost the retirement balances<\/a> of millions of workers over the years ahead.<\/p>\n Employers will need to deposit their employees\u2019 compulsory 12 per cent super guarantee<\/a> into their fund within seven days of payday, or they will face significant penalties. Under the current law, employers only need to pay super quarterly.<\/p>\n Treasurer Jim Chalmers and Assistant Treasurer Daniel Mulino said employees would benefit from more frequent and earlier super contributions<\/a>, while the change would also help the Australian Taxation Office (ATO) detect unpaid super<\/a> earlier.<\/p>\n RELATED<\/p>\n \u201cFor the average 25-year-old worker\u2019s retirement balance, this is the equivalent of receiving an extra $6,000 in today\u2019s dollars,\u201d they said in a joint statement.<\/p>\n \u201cIf a worker is missing out on their super the impact is even more significant. 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\u2019s dollars.\u201d<\/p>\n The Australian Taxation Office estimates $6.25 billion worth of super went unpaid on the most recent financial year.<\/p>\n Do you have a story to share? Contact tamika.seeto@yahooinc.com<\/a><\/p>\n The superannuation sector<\/a> has welcomed the payday super change, which was first announced by the government more than two years ago.<\/p>\n Association of Superannuation Funds of Australia (ASFA) CEO Mary Delahunty said the reform would go some way to addressing the problem of unpaid super.<\/p>\n \u201cPayday Super is one of the most significant reforms to the superannuation system in decades, and it\u2019s long overdue,\u201d she said.<\/p>\n Super Members Council CEO Misha Schubert said the change would make a big difference for millions of Australians not being paid super correctly.<\/p>\n \u201cThe 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,\u201d she said.<\/p>\n Australian Unions have also welcomed the change, calling it a “win for workers fighting super theft”.<\/p>\n Small businesses have raised concerns<\/a> about the start date of the reform, with just eight months left.<\/p>\n Council of Small Business Organisations Australia (COSBOA) chair Matthew Addison said the group supported the principle of payday super, but argued businesses needed more time<\/a> and support to implement the changes.<\/p>\n \u201cWe support the intent of Payday Super, but good policy needs to work in practice,\u201d Addison said.<\/p>\n Addison explained the process to ensure super contributions reach employees\u2019 funds typically took five to 10 business days, and significant upgrades would be needed across payroll software, clearing houses, super funds and the ATO.<\/p>\n \u201cWe\u2019re trying to build a complex new system on foundations that aren\u2019t ready,\u201d he said.<\/p>\n \u201cEvery payroll provider, super fund and gateway needs to redesign and test their systems before launch, and that takes years, not months. The government\u2019s own papers say it can take up to three years to implement. Right now, we have eight months.\u201d<\/p>\n Employment Hero chief executive Ben Thompson said the changes could increase the working capital needed by small and medium businesses by as much as $124,000.<\/p>\n \u201cThat reduction in working capital could really push businesses to the edge of insolvency and put jobs at risk,\u201d Thompson said.<\/p>\n The ATO has indicated that it won\u2019t issue harsh penalties to employers who miss the payment deadline due to delays outside their control.<\/p>\n It will differentiate between low and high-risk employers, so those who are making the effort to pay contributions in line with each pay cycle will fall into the low-risk category.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n