Employers Urged to Prepare for July 2025 Payday Super Changes

Australian employers are being urged to begin preparations for a significant shift in superannuation payment rules, requiring them to pay employee superannuation alongside their salaries and wages starting July 1, 2025.

The new “payday super” legislation, which recently passed parliament, mandates that super contributions be deposited into employee funds within seven days of payday – a change from the previous quarterly payment schedule. Failure to comply will result in penalties, including an updated super guarantee charge encompassing the shortfall, daily interest, and a potential enforcement charge of up to 60 percent of the unpaid amount. The Australian Taxation Office (ATO) estimates $6.25 billion in superannuation went unpaid during the last financial year, highlighting the need for improved compliance.

ATO Deputy Commissioner Emma Rosenzweig emphasized the importance of proactive preparation, stating, “Don’t wait until the last minute, we want employers to start planning for Payday Super now to ensure they are prepared for when the law takes effect.” She also noted that earlier contributions can significantly boost retirement savings – potentially by an extra $6,000 for a 25-year-old and over $30,000 for a 35-year-old who has experienced unpaid super. This change aims to improve retirement outcomes for Australians and make it easier to recover unpaid funds. For more information on superannuation, visit the ATO website.

The ATO plans a risk-based compliance approach during the first year, focusing on employers who don’t attempt to rectify issues. CPA Australia has supported this approach but has called for transitional relief to be extended to June 30, 2028, and for clearer guidance on implementation. As Rosenzweig stated today, the ATO is finalizing its compliance approach and working with industry groups to ensure a smooth transition for employers.