Millions of Australian workers are set to retire with thousands more in their superannuation accounts after changes from the federal government requiring all businesses to pay their employees' superannuation on payday.
From July 1, 2026, employers will need to pay super on payday, rather than quarterly, making it easier for workers to track when their super is not being paid.
The change also reduces the risk of unpaid superannuation debts when a company collapses into bankruptcy.
Treasurer Jim Chalmers said the more frequent super payments would increase retirement incomes.
"It's just common sense to pay it with wages," Mr Chalmers said.
"It's a simple change, it will strengthen the system and it will boost retirement incomes — and the main reason for that is that it will make it less likely that people will miss out on the super they have earned and that they are entitled to."
In a joint statement, Mr Chalmers and Assistant Treasurer Stephen Jones said that under the changes a 25-year-old earning average wages would be $6,000 better off when they retired because more frequent payments allowed more time for investment earnings to compound.
Billions lost in unpaid super
According to Industry Super Australia (ISA), in 2019-20 about 2.5 million employees missed out on an estimated $4.3 billion in super, with more than a quarter of employees losing an average of $1,736 per year.
ISA said that, in the financial years between 2013-14 and 2019-20, there was $33 billion underpaid at an average of $4.7 billion per year.
Mr Jones previously told ABC News he would announce new targets in the May budget for the ATO to recover people's unpaid super.
The government also argued the changes would make it easier for businesses, which would have fewer liabilities building up on their books.
Many businesses already pay superannuation entitlements into funds at the same time they pay wages to their employees.
"While most employers do the right thing, the Australian Taxation Office (ATO) estimates $3.4 billion worth of super went unpaid in 2019-20," Mr Chalmers and Mr Jones said.
"Too many people are missing out on the super they have earned and are entitled to," Mr Chalmers added.
The ATO will also receive more resourcing to detect unpaid super sooner.
Super industry, unions say millions to benefit
ACTU assistant secretary Scott Connolly said mandating that superannuation be paid with wages would make it easier to detect and recover unpaid super, as well as help prevent its non-payment, since quarterly payments would no longer obscure what workers were owed.
"Millions of workers have billions of dollars of retirement savings unpaid every year — timing superannuation payment with wages will make this harder," Mr Connolly said.
"Working people will also soon have superannuation recognised as a workplace right in the National Employment Standards, meaning workers and their unions can commence recovery action sooner to stem the haemorrhaging of retirement savings."
Industry Super Australia chief executive Bernie Dean said many of the one in four workers currently underpaid every year would get a boost to their super savings.
"This is a big win for the 3 million mostly young and lower-paid Australians unfairly deprived the super they've earned and will give them a better shot at building a good nest egg for retirement," he said.
"Aligning payment of super and wages is the right thing to do by workers, boosts government revenue, lifts investment returns and puts all employers on a level playing field."
Mr Dean said quarterly super payments had made it difficult for workers to keep track of payments and for the ATO to monitor compliance in real time.
Rest chief executive Vicki Doyle, whose fund represents almost 2 million Australians, many of whom work in lower-paid industries such as retail, said the decision made the superannuation system fairer and more equitable.
"A significant proportion of our members have their superannuation guarantee payments either paid monthly or less frequently, and this is often out of sync with their take-home pay," she said.
The Association of Superannuation Funds of Australia (ASFA) deputy chief executive Glen McCrea welcomed the announcement.
"Left unaddressed, the issue of unpaid superannuation guarantee contributions comes at a significant cost to people's retirement," he said.
Mr McCrea argued the July 1, 2026, start date provided "ample lead time for the ATO and business to update systems and processes to implement the change".
The "payday super" change is the second reform to superannuation announced in recent months. It follows the government's decision to raise the tax rate on superannuation accounts with more than $3 million.
The prime minister denied doubling the tax rate on those accounts constituted a broken promise, as it would not take effect in this term of government.
Anthony Albanese said at last year's federal election there was no plan to make changes to superannuation.
