Unions have always campaigned for a dignified retirement for all working people.
When union members won superannuation more than 30 years ago, it was a vital step towards achieving this aim.
The Albanese Labor government has taken another step with a new law to ensure employers pay super when they pay wages – not months later. The law comes into effect on 1 July 2026.
Pay day super means an employee’s superannuation must be paid into their super fund at the same time their wages are paid.
School employers must get payroll systems ready, so members see their super land every pay cycle – on time, every time. Contributions will generally have to reach funds within seven business days of payday, ending what for some was a quarterly lag.
Why this change matters
More frequent payment of superannuation will empower employees to track their entitlements, and make it harder for disreputable employers to exploit the system. Employees will be able to see these payments by reviewing both their payslip and their superannuation account transactions.
They can hold employers to account by raising non-compliance directly with their employer, their union, the Fair Work Ombudsman or the Australian Taxation Office.
The Treasurer has called unpaid super “a form of wage theft” and flagged stronger, faster enforcement.
Each year more than $5 billion that should be in workers’ accounts is not paid, hitting young workers, women, migrants and insecure workers hardest.
Now, employers will have to fix late or missing payments quickly and repeat offenders will face tougher penalties. Workers will be compensated for any lost earnings.
Requiring employers to pay super on pay day means millions of workers will retire with tens of thousands more in their super fund.
Features of the new super laws:
- pay super on payday (at the same time as wages)
- funds must receive the Superannuation Guarantee (SG), currently 12 per cent, within seven calendar days of payday
- redesigned Superannuation Guarantee Charge (SGC): auto-calculates, simplifies, issues tougher penalties, ensures workers are compensated.
A dignified retirement
Union members have long insisted on the right to a retirement that is supported and dignified. This is what the superannuation system is intended to do. Superannuation emerged as a major industrial issue from the 1960s, with the Waterside Workers’ Federation starting a fund for stevedores in 1967.
Union members campaigned throughout the 1970s and 1980s for the right to superannuation, often facing fierce resistance from employers. A system of compulsory superannuation was introduced in 1992 by the Keating Labor government. Unions agreed to forego a 3% pay increase which was instead put into the new superannuation system.
From 1992 to 2002, the level of compulsory super (the SG) rose to 9%. Campaigning by unions and their members has seen the SG increase to 12% from 1 July 2025.
More money at retirement
Paying super on payday means compounding starts sooner. The federal government says a typical 25-year-old could retire $6000 better off, while industry analysis points to an average boost of $7700.
If your employer doesn’t pay super when they should – contact the IEU.
For more details, see the next edition of Newsmonth, out in July.