Australian workers will soon receive a significant boost to their retirement savings as major superannuation reforms are set to take effect from 1 July 2026. The government introduced new payday superannuation legislation to parliament on 8 October 2025. This change requires employers to pay super contributions at the same time they pay wages, rather than quarterly, as is currently the case.
The aim of this reform is to curb unpaid superannuation, which the Super Members Council found caused a loss of $5.7 billion in missed contributions across 3.3 million Australians during the 2022-23 financial year. On average, each affected worker missed out on $1,730 annually, potentially leading to a shortfall of $30,000 by retirement.
Payday Super Laws Introduced
The payday superannuation legislation mandates employers to remit super payments within seven days of paying wages starting from 1 July 2026. Treasurer Jim Chalmers highlighted the significance of this reform. He said, “In a typical unpaid super scenario, a 35-year-old recovering their super could see their retirement savings increase by more than $30,000 in today’s terms.” He further noted that while most employers comply responsibly, a minority exploit workers.
The reform also updates penalties for missed or late super payments to ensure compliance. The Super Members Council described the change as “long overdue” and urged rapid passage of the legislation to meet the implementation deadline. Misha Schubert, CEO of the council, said, “Payday super is a straightforward, equitable, and urgent reform. It ensures every dollar owed to workers is deposited promptly and in full.” She added this change is expected to increase retirement savings by an average of $7,700 due to faster compounding growth.
Comparison of superannuation payment systems in Australia
Super Guarantee Increased to 12%
Alongside payday super reforms, the superannuation guarantee rate increased from 11.5% to 12% on 1 July 2025. Employers must now pay 12% of an employee’s ordinary time earnings into their super accounts. This rate increase will add approximately $20,000 to the lifetime super savings of a median wage earner who starts earning super at age 30 and retires at 67.
For the 2025-26 financial year, the maximum contributions base per quarter is capped at $62,500, resulting in a maximum super payment of $7,500 per quarter. The 12% rate applies to ordinary earnings up to $250,000 annually, with Division 293 tax applying to high income earners.
Impact on Workers and Retirement Savings
The payday super reforms and increased guarantee rate combine to deliver a dual boost. Australians will receive timely contributions while benefiting from a higher contribution percentage. These reforms aim to enhance retirement outcomes for millions of workers by securing employer super payments and increasing contribution levels.
The importance of timely contributions extends beyond compliance. Paying super on payday helps prevent gaps in contributions that delay compounding growth. The government expects these changes to reduce the risk of super shortfalls, which the Super Members Council noted have led many workers to retire with less than optimal savings.
Financial benefits breakdown of Australian superannuation reforms
Government and Industry Support
The government positions payday super as a critical reform for fairness and financial security. Treasurer Chalmers emphasised the urgency of the changes to help workers “earn every cent” of their superannuation. Industry groups including the Super Members Council have publicly supported the legislation, describing it as equitable and workplace-friendly.
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Broader Superannuation System Updates
Other superannuation updates began from July 2025. The government started paying super contributions during government-funded paid parental leave. The transfer balance cap increased to $2 million to account for inflation. Early access rules tightened from October 2025 to restrict withdrawals and preserve retirement savings. The concessional contributions cap stands at $30,000 for the 2025-26 financial year.
Conclusion
The major payday superannuation reform from July 2026, coupled with a higher super guarantee rate, represents a substantial boost for Australian workers’ retirement savings. The reforms promise an average retirement savings increase of $30,000 for affected workers by ensuring timely contributions and increasing employer contributions to 12%. These changes respond to widespread super shortfalls and unpaid contributions that previously undermined retirement outcomes. The government and industry stakeholders alike urge swift adoption and compliance with these changes to secure workers’ financial futures.
In detail, these reforms usher in a new era for Australia’s super system, enhancing fairness and ensuring workers receive all their entitled superannuation promptly. Employers must comply with the new payday payment requirements, while workers can expect more reliable and increased super contributions over their working lives.
