Keeping Up with Super Changes: Payday Super and Paid Parental Leave Superannuation
At My CPE, we strive to keep our audience informed of key developments that impact the finance sector. As part of this commitment, we have been closely following two upcoming changes set to impact superannuation payments in Australia. These initiatives will affect employers, employees, and families across the nation, enhancing the superannuation landscape for both immediate needs and long-term financial security.
- Payday Super: A Move Toward Timely Super Contributions
Starting from 1 July 2026, the Federal Government has announced that employers will be required to make Superannuation Guarantee (SG) contributions at the same time as their employees’ salary and wages. Known as payday super, this change will require employers to align SG payments with payroll, moving away from the traditional quarterly payment approach.
This shift is designed to improve both the consistency and reliability of superannuation payments for employees. By reducing delays in contributions, it will ensure that employees’ super accounts are credited more frequently, presenting an added opportunity for compounding growth over time.
For employers, however, payday super is expected to bring some administrative and cashflow adjustments. Transitioning to more frequent SG payments will necessitate a closer monitoring of cash flow management, payroll processes, and compliance measures to adapt to these ongoing obligations. The extended preparation period until July 2026 should provide businesses with ample time to update systems and align processes to meet this requirement.
In the long term, payday super promises to enhance the overall super compliance landscape. Employees will have access to timely super contributions, which will gradually address the issue of unpaid or delayed SG payments and foster better financial growth and security for the workforce.
- Superannuation on Government-Funded Paid Parental Leave
The second change to superannuation legislation centres on super payments for Government-funded Paid Parental Leave (PPL). This long-anticipated change, which takes effect on 1 July 2025, aims to tackle the gender super gap. The gap, largely due to career breaks for caring responsibilities, leaves many women with lower super balances upon retirement compared to their male counterparts.
The new legislation means that super will now be paid on Government-funded PPL, marking a significant step forward in addressing structural inequalities within the super system. The Government estimates that approximately 180,000 families will benefit annually from this change.
By making super available during PPL, the reform acknowledges the importance of continuing to build superannuation balances even while on parental leave. The overall effect of this policy is anticipated to be particularly beneficial for women, who often face a disproportionate impact on their super balances due to extended time away from the workforce.
Preparing for Change
Both the payday super and PPL super changes reflect a broader movement towards fairer, more consistent super practices across Australia. As the start dates approach, businesses should be readying themselves for the practical implications, from cashflow adjustments to updating payroll systems. Employees, too, stand to benefit from these reforms with increased retirement savings and, for some, improved financial security during periods of parental leave.
Stay tuned for further updates as these changes unfold and as more information becomes available.
Sonya Farrawell, My CPE CEO
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