The current state of the Superannuation Guarantee in Australia
If you are reading this, then you’ve probably heard of the myriad of change in the Superannuation sector of late.
It could include the new “payday super” rules coming into effect in 2026 for employers, Late super payments and the Super Guarantee (SG) forms, or even the constantly increasing rate of super guarantee!
With so many new rules and regulations and rates constantly changing, let’s have a bit of a look at what the current state of superannuation is in Australia and have a brief overview of how we got here!
Super Guarantee
The Super Guarantee is the fixed rate that employers have to pay on employee salaries. Some salary packages include Super, others don’t (so make sure you read your employment contract!)
At the time of writing this, the current rate is 11% (FY2024) and is increasing by 0.5% each year until it hits 12.5% from 1 July 2026.
The whole scheme started in 1992 when the government decided that they didn’t want to fund the ageing populations retirement with government funds. So they thought “Hey, what better way to not give out government money, then to make employers put money into employees super on their behalf!”.
This way, employers pay money into employees’ super funds, who have no way of accessing their super early and when they retire, are guaranteed to have some money to live off!
As an employer, it is important to keep the SG rate in mind when budgeting for new staff, as the super guarantee’s short-term increases will increase wage costs, in addition to staff requesting raises each year too!
Payday Super
From 1 July 2026, all pay runs will require superannuation to be paid ON THE SAME DAY.
Currently, Super is only required to be paid quarterly, so why has the government decided to change it to payday? Simple! More money in Australians’ Super at retirement!
Payday Super was also introduced to allow employees to keep better track of disreputable employers not paying super on time. For reference, the ATO noted that there was an estimated $3.4 billion in unpaid super in 2019-20 alone!
So if employees aren’t getting paid their super, then the ATO will know sooner and be able to take action against dodgy employers!
Think of it this way, you get super paid each quarter of $1,200; or $4,800 for the year.
You earn income of that money as it’s invested in your fund, but it’s only invested quarterly in $1,200 chunks by your fund so it takes time to build up that balance.
Now imagine it’s $100 weekly. That money goes into your fund, is immediately invested and suddenly your balance is $101 in just a few weeks as that initial $100 has generated some income, boosting your super balance.
Continue that thinking for each payment and you’ll be guaranteed to have more money when you retire than under the quarterly payments!
For employers, there are a couple of implications for this:
Making sure you have enough cash to pay staff wages and super as they fall due.
Having staff Superannuation Fund details ready BEFORE the first pay run.
Late Super Payments and the SG Forms
Historically, businesses haven’t worried too much about getting staff super details immediately when a staff member starts. They only get it when they are required to make their first super contribution.
However, that is a dangerous way of thinking.
It is now extremely important to have those details immediately, especially since the ATO now make employers prepare and lodge pesky SG forms for any late payments (and I mean even super payments that are 1 day late)!
These forms include non-tax-deductible charges and interest for the businesses and can be annoying and time consuming to prepare.
The fee is $20 per staff member and interest is at 10% per annum. Now, for a hospitality business that employs 100+ staff, one late super pay could cost more than $2,000 in non-deductible fees! (OUCH!)
In short, make sure you have employees’ super information setup well in advance to avoid these fees!
If your excuse is “they didn’t give me their details, how is it my fault?”, the ATO no longer accepts that as a reason. You can request directly from the ATO an employee’s “Stapled Fund”, which is their default Superannuation Fund.
Any new employees who have never worked before are required to be provided a standard Super Choice Form or can use the employer’s nominated default Super Fund.
If you need any assistance with these forms, you can always reach out to us and we can prepare them on your behalf and advise you on what you have to pay!