For many Australians, superannuation isn’t just a line item on a payslip. It’s a vital part of their financial future. The super system was built to support Australians in retirement after decades of work.
But despite its importance, unpaid super remains a widespread and costly problem. Every year, billions of dollars in superannuation entitlements go unpaid, leaving workers short changed and putting their future financial security at risk.
That’s where the government’s upcoming reform, known as “Payday Super,” is hoping to have a positive impact. This initiative is designed to ensure that super contributions are paid at the same time as wages, closing the window for missed or delayed payments and helping to protect workers’ entitlements.
In this blog, Paytime explores why it’s important to understand how unpaid super occurs, how payday super addresses the issue, and the role regulatory bodies and employers will play in enforcing this systematic change.
Table of Contents
- Issues of Unpaid Super
- How Payday Super Works
- Why Does the Timing Matter
- The Role of Regulators in Driving Compliance
- How Employers Can Prepare
- Blog in summary
Issues of Unpaid Super
According to the Australian Taxation Office (ATO), more than $2.5b in superannuation goes unpaid each year.
This affects nearly three million workers each year. These are real people missing out on the retirement savings they’ve rightfully earned.
Unpaid super is often most prevalent in industries like hospitality, construction, and retail where casual or contract work is more common. However, it can happen in any workplace, especially where oversight is lacking or where employers struggle to meet quarterly payment deadlines.
Currently, employers are only required to pay super contributions quarterly. This lag between when an employee earns their super and when it is paid can create problems.
For example, if an employer faces financial difficulties or becomes insolvent during that window, super payments may never be made, and because many workers don’t closely monitor their super accounts, these shortfalls often go unnoticed until years later.
How Payday Super Works
The idea behind payday super is simple. Instead of waiting until the end of each quarter to make super contributions, employers will be required to pay them at the same time as wages. So, if an employee is paid fortnightly, their super will be paid fortnightly too.
This reform is scheduled to take effect from 1 July 2026, giving employers time to adjust payroll systems and internal processes. For employees, it means greater transparency and certainty that their super is being paid in line with what they earn.
Payday super creates a direct connection between work and entitlements. It helps workers track contributions more easily and makes it much harder for employers to delay or miss payments without detection.
Why Does the Timing Matter
While a delay in payment might seem harmless on the surface, it can have significant long-term consequences. Superannuation is an investment.
The earlier contributions are made, the longer they have to grow through compound interest. Missing out on a few thousand dollars today can translate to tens of thousands of dollars less in retirement.
Over time, those lost opportunities add up and can result in a drastically smaller nest egg. Beyond the numbers, timely super payments reflect a basic principle of fairness.
Workers are entitled to this money. Being paid super on time, just like wages, reinforces the value of their contributions and helps create a more secure retirement.
The Role of Regulators in Driving Compliance
The ATO already plays a major role in identifying unpaid super through data-matching and employer reporting. With payday super, their ability to detect non-compliance will be even stronger.
Real-time data will allow the ATO to identify issues earlier, meaning corrective action can be taken before the problem grows. Regulators have signalled that they will be tightening enforcement as part of the rollout.
While penalties already exist for unpaid super, there will be a greater push for accountability. This means employers who fail to meet their obligations can expect increased consequences.
At the same time, regulators are providing guidance to help employers navigate the shift. The goal is not just to punish non-compliance but to build a system that encourages and supports paying super accordingly to take care of the financial future of Australians.
How Employers Can Prepare
For many businesses, adapting to payday super will involve updating payroll software and working with providers who can automate contributions. Those already paying super more frequently than quarterly are ahead of the curve.
Employers should take the time now to audit their current processes and assess whether they’re ready for the change. It’s also a good opportunity to engage with staff and provide transparency around how super is paid.
Smart software plays a crucial role in helping businesses simplify and streamline their payroll systems. By offering features like earned wage access and enhanced payroll visibility, these services empower both employers and employees to take greater control of financial wellbeing.
The introduction of payday super aligns well with these capabilities, supporting a more transparent and compliant approach to employee entitlements. A workforce that trusts its employer to deliver pay and entitlements correctly is a more engaged and productive one. Building that trust starts with timely, transparent payments.
Blog in summary
The introduction of payday super is a meaningful step towards protecting workers and strengthening Australia’s retirement system. By removing the delay between earning and receiving super, it closes the loopholes that have allowed billions of dollars in entitlements to go unpaid.
As 2026 approaches, businesses have a real opportunity to lead with integrity and prepare for the change. At Paytime, we’re here to help businesses navigate this transition and build systems that put workers first because when everyone gets paid what they’ve earned (on time and in full) the system works better for everyone.