What are superannuation changes?
Superannuation changes involve amendments to legislation or new bills introduced to the Federal Parliament that alter the conditions for paying and accessing superannuation.
Changes to superannuation in Australia can apply to a range of conditions. In 2024, the Australian Taxation Office reported numerous modifications to the system were designed, built, tested or onboarded. Not all of them, however, directly affect employers. Some changes impact an individual’s tax obligations, while others involve how individuals can access their superannuation.
Employers will need to consider two key superannuation changes outlined in 2024. One of these changes was legislated in 2011, and employers have already dealt with related measures in previous years. A third change will not directly impact employers, but it may be something you will want to consider implementing in your organisation.
Increase to superannuation guarantee
The superannuation guarantee rate — or the proportion of employees’ salaries or wages that must be paid as superannuation — has increased yearly since 2013, after it was legislated in 2011. One more increase is scheduled under this legislation. From July 1, 2025, the rate will increase from 11.5% to 12%. Employers must pay this increased amount from this date.
No more increases are scheduled from this date, meaning employers will be required to pay 12% for the foreseeable future.
Payday Super
Employers are currently only required to pay the superannuation guarantee into their employees’ super funds once every quarter.
In 2023, the Australian Government announced they intended to change the superannuation system, requiring employers to pay their employees’ superannuation guarantee within seven days of paying their salary or wages. With a proposed start date of July 2026, the preferred option is for employers to pay superannuation into staff accounts on the same day as their salary or wages.
The changes are being introduced to help maximise employees’ superannuation earnings so they can be financially better off in retirement. They will also help employees better keep track of their super payments and ensure they have been paid.
Employers, meanwhile, will be held liable if their employees do not receive their superannuation in full within seven days of their payday. This may mean that employers may be required to pay levies, penalties or interest on the outstanding amount to their employees. It does not matter if an employer pays their staff weekly, fortnightly or monthly – the seven-day limit will apply.
Other changes, such as the retirement of the Small Business Superannuation Clearing House, may also affect small business employers if they become effective. If so, another system will be developed to replace it.
Super on Government-funded Parental Leave Pay
This change to superannuation does not directly impact employers, but you may want to be aware of it because of the implications for your workforce or the questions your staff may raise about it.
Eligible employees can access Parental Leave Pay at the National Minimum Wage when a child is born or adopted. The Australian Government intends to include super on these payments from July 1, 2025, for children born or adopted on or after the same date.
For employers who provide additional Parental Leave Pay entitlements to their employees, superannuation on these payments remains voluntary. However, these employers may want to consider whether they voluntarily change their organisation’s policy to include superannuation on these payments if the policy does not currently include this to comply with government changes.
Related: Guide to Paid Parental Leave in Australia
How employers can prepare for superannuation changes
Large and medium-sized businesses may have finance/accounts personnel and employment law advisers who will be across any changes and can advise employers or change payment methods accordingly.
Small business employers, however, may need to pay more attention to these changes. Engaging an employment law consultant to help guide you through the changes and ensure you comply with the current law may be an advantage. These professionals are experienced in these issues and will know how to advise you.
The Australian Taxation Office’s website offers free information, including an online course about employer obligations regarding superannuation. The website also lists other ways employers can contact the ATO to receive support.
Most superannuation funds also have advisers dedicated to helping employers meet their obligations. Employers can contact their default nominated super fund for assistance.
Previous superannuation changes in Australia
When considering future changes, it is also a good time to check that past changes have not been inadvertently overlooked. The Super Members Council reports that 2.8 million Australians missed out on a combined $5.1 billion in legally required super payments in the 2021-22 financial year, and employers face penalties for not making these payments.
Low-earning employees
Before July 1, 2022, employers did not have to pay superannuation to any employee who earns less than $450 a month. These typically were casual or part-time employees who may only work for you a few hours a week or a few times a month.
Since that date, employers have been required to pay employees aged 18 years and over their super guarantee, regardless of their monthly earnings.
Employees aged under 18 years
From July 1, 2022, employees under 18 who work more than 30 hours in one week must be paid super, regardless of their earnings. The number of hours cannot be averaged across a pay period, such as a fortnight or a month.
Before this date, employers only had to pay super to employees in this age group if they earned $450 or more (before tax) in a month. Employees under 18 who work 30 hours or fewer do not have to be paid superannuation.
Superannuation may seem like something employers can put off and tackle at a later date, especially as most Australians cannot access their super until they have retired. However, staying on top of changes as they occur is important. Staying abreast of proposed changes can help you better plan and be ready if amendments become effective. With advice and support readily available, it is not as challenging to stay up-to-date as you may think.
Read more: How to Navigate Pay Transparency Laws
