‘A win for workers’: Payday Super passes Parliament

“One of the most significant reforms to the superannuation system in decades” has now passed both houses of Federal Parliament.

In early September, the Albanese government introduced the Treasury Laws Amendment (Payday Superannuation) Bill 2025 to Parliament, requiring employers to pay their employees’ super at the same time as their salary and wages. On Tuesday (4 November), the legislation passed the Senate, having passed the House of Representatives on 30 October. The changes will take effect from 1 July 2026.

The new laws will, among other things: require employers to ensure super contributions are received by the employee’s fund within seven business days of payday, or they will be liable for the superannuation guarantee charge; help the Australian Taxation Office (ATO) enforce the law and more quickly identify employers not making contributions; and redesign the superannuation guarantee charge to be fit for purpose and make Payday Super work.

The legislation has been the subject of much scrutiny, including employer concern that it will unfairly penalise businesses. However, last month, the ATO’s draft compliance guide for Payday Super laws stipulated that businesses could still be deemed “low risk” if occasional late payments are made due to processing errors.

Speaking following the passage of the legislation in the Senate, Treasurer Jim Chalmers said the new laws will benefit the retirement incomes of millions of Australians.

“These laws are all about reforming our superannuation system to help ensure more Australians get the secure retirement they need and deserve. From the 1st of July next year, employers will be required to deposit their employees’ super into accounts within seven business days of payday. This will strengthen Australia’s superannuation system and help deliver a more secure retirement to more Australian workers,” he said.

“Employees will benefit from more frequent and earlier super contributions that will grow and compound over their working life. For the average 25-year-old worker’s retirement balance, this is the equivalent of receiving an extra $6,000 in today’s dollars. If 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, the Treasurer continued, recovering their super leaves their retirement balance more than $30,000 better off in today’s dollars.

“While most employers do the right thing, the Australian Taxation Office estimates $6.25 billion worth of super went unpaid on the most recent financial year data,” he said.

“This issue disproportionately affects more vulnerable Australians and women. That’s because those on lower-paid, casual and insecure work – who are more likely to be women – are most at risk of missing out on their super.”

Reforms to benefit the most vulnerable

Responding to the passage of the legislation, the Australian Council of Trade Unions (ACTU) said the new laws mean that millions of workers will retire with tens of thousands more in their super fund.

ACTU assistant secretary Joseph Mitchell said: “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.

“This is a reform which will help those who suffer from super theft the most: young people, migrants, women and those in insecure work.

“The ACTU congratulates the Albanese government and all parliamentarians who supported this vital reform.

“Payday super and the government’s prior reforms to put super in the National Employment Standards are crucial tools that provide workers more rights to ensure they’re paid their super on time and in full.”

The news laws are “a win for workers fighting super theft”, the ACTU noted in a statement, particularly the nearly one in three workers in their 20s and the 28 per cent of workers in their 30s who have had their super stolen.

Mary Delahunty, the chief executive of the Association of Superannuation Funds of Australia (ASFA), added that the reform will go some way to address the problem of unpaid super, which sees more than $5 billion in retirement savings withheld from Aussie workers each year.

“Payday Super is one of the most significant reforms to the superannuation system in decades, and it’s long overdue. Paying super with wages will make the system fairer, boost retirement balances, and ensure super is achieving its core objective,” she said.

“The sector has long advocated for this change, and now that it’s law, the real work begins: ensuring regulations are practical, delivering a smooth transition for employers, payroll providers, and funds alike. ASFA will lead that work on behalf of the sector.”

Super Members Council chief executive Misha Schubert said: “This is a historic day which will make a huge difference to help 3.3 million Australians retire with more income to cover the cost of living.”

“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.

“Payday super will also help to deliver an average of $7,700 more for working Australians by retirement, because being paid your super sooner helps to grow your investment returns faster.”

The Super Members Council’s modelling shows 3.3 million Australians were not paid $5.7 billion in super in 2022–23, missing out on an average $1,730 each a year. Those losses can make people up to $30,000 poorer at retirement.