Why Payday Super was introduced¶

Paying super every three months worked for a long time, but it had a weakness. If an employer fell behind, the gap could grow for months before anyone noticed. Payday Super was introduced to close that gap by making super part of every pay.

The change lines super up with wages, so it is paid — and invested — sooner. This lesson explains the reasons behind the change, using the ATO's stated aims.

In one line

Payday Super was introduced to reduce unpaid super, invest super sooner so it can grow, and make missed super easier to spot early.

Why this matters¶

Super is money set aside for an employee's retirement. When it is paid late or not at all, the employee misses out — not just on the amount, but on the years of growth it could have earned. Understanding why the rule changed helps everyone see the point of paying super on time.

What you will learn¶

The main reasons Payday Super was introduced
How paying super sooner can help it grow
How the change helps spot missed super earlier

Understanding the concept¶

The ATO gives a few connected reasons for the change.

To reduce unpaid super. Some employees were not getting the super they were owed, or were getting it late. Aligning super with each payday is aimed at reducing unpaid super and deterring non-payment.

To give earlier visibility. Because super is now expected each payday, the ATO gets a much earlier view of any under-payment or non-payment. That means problems can be picked up sooner, rather than months later.

To help super grow sooner. When super reaches a fund earlier, it can be invested earlier. Money invested for longer has more time to grow, which the ATO links to better retirement outcomes for employees. The rules also include an interest-style amount so that if super is paid late, employees are compensated for the delay.

Put simply, the aim is to make sure employees get their full super, on time, so it can start working for their retirement as early as possible.

For accountants & bookkeepers

The ATO explains that under Payday Super, if super is paid late, a charge is worked out that includes an amount reflecting the earnings the employee would have had. The ATO describes this as being compounded over the late period, so the design encourages on-time payment and protects the employee's retirement outcome. We do not quote the rates here — always check the current ATO figures.

Example¶

Sam earns super each payday at Priya's cafe. Under the old quarterly system, if a payment had been missed, it might not have shown up until the quarter's due date passed. Under Payday Super, the same super is expected every payday, so a missed payment stands out much sooner — and Sam's super reaches the fund and starts being invested weeks or months earlier than it would have before.

Common mistakes¶

Thinking the change is only about paperwork — the main goal is employees getting their full super on time.
Assuming late super has no cost — the rules are designed to compensate employees for delays.
Overlooking the growth effect — super invested sooner has more time to grow.

How this works in myaccountant¶

In the app — myaccountant works out each employee's super as part of every pay run and shows when it must reach the fund. By making super part of each pay, the app helps you pay on time, which is exactly what the new rules are designed to encourage.

Key points¶

Payday Super aims to reduce unpaid super and deter non-payment.
Paying each payday gives the ATO earlier visibility of missed super.
Super paid sooner can be invested sooner, giving it more time to grow.
The rules compensate employees when super is paid late.
The overall goal is better retirement outcomes for employees.

Learn next¶

General information only — not tax, super or financial advice.

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