More superannuation changes are afoot, and many smaller businesses are nervous, as they face a double-whammy of increased costs.

As well as an extra 0.5% of guaranteed super from 1 July this year, bringing payments to 12% of gross wages, revised rules could see 'payday super' introduced next year.

Under current law employers are only required to pay super quarterly, but proposed changes would require employers will have to pay super at the same time as they pay employee's wages (weekly or fortnightly) from 1 July 2026. 

According to the Superannuation Members Council, it is estimated that a total of 2.8 million workers missed out on approximately $5.1 billion in super between 2021-22.

Over 9 years to June 2022, Australians missed out on $41.6 billion.  

The issue of unpaid super particularly affects young people, lower-income earners, migrants, and people in insecure work, according to SMC.  

Payday super aims to tackle that inequality, helping nine million Australians to have their super paid earlier.  

Under the amendments to the law, employers that fail to pay contributions in full and on time would be liable for the super charge guarantee, a payment greater than the super owed that employers get charged if they don't pay super on time.  

Association of Superannuation Funds of Australia (ASAF), the peak body for the superannuation industry, says the changes will benefit workers, because regular fortnightly payments will produce more compound interest than quarterly payments.  

"So a median-earning 25-year-old will be on track to be $6,000 better off in retirement from that change," said ASAF Chief Executive Officer Mary Delahunty.  

However, not everyone agrees with the decision.  

Coonamble-based accountant Geoff Secombe says the decision will disproportionately impact small businesses.  

"I think payday super will prove a disaster for small business. I think they should abandon the concept and just stick to what they currently have, which is difficult enough for most small businesses to contend with," he said.  

"Because the time frame available to small business and the lack of resources that small business have will make it too hard for them to do it on time, which means they will be constantly penalized by the tax office.  

"We often see people who can't make the deadline for 28 days after the end of each quarter, principally because trying to get all the details out of employees, and particularly in the pastoral industry, is really difficult. 

"The only thing this payday super is going to do is make more money for the tax office, and they'll get it faster."  

CPA Australia Superannuation Lead Richard Webb. IMAGE: CPA Australia.

Certified Practising Accountants (CPA) Australia has expressed similar sentiments, calling for a delay to payday super's implementation.  

CPA Australia’s Superannuation Lead Richard Webb said that while the company supports payday super, it doesn't believe businesses are ready for the switch yet. 

“One of our main concerns is that the superannuation transmission network will not be ready to manage the increased traffic by July next year,” said Mr Webb. 

“We believe it is vital to postpone the start date for Payday Super by at least a year, ideally 24 months, to allow all stakeholders sufficient time to comply with the new logistical demands on the system."  

While industry and accountants believe the roll-out will cripple businesses, unions are supportive of the decision.  

Australian Council of Trade Union's Assistant Secretary, Joseph Mitchell said the changers were critical for workers, and would grow their retirement funds significantly.  

“Payday super is critical to improving workers’ retirement outcomes and stopping super theft. By making super paid at the same time as wages, workers will retire with thousands of dollars more in their superannuation accounts. 

“Superannuation is workers’ retirement savings, not the cash of employers. When workers earn superannuation, they should be paid at the same time as their payday. 

“All Australians deserve to retire in dignity and the Government’s payday super legislation will make a significant contribution to realising this.” 

Australian Council of Trade Union Assistant Secretary Joesph Mitchell. IMAGE: Australian Council Trade Unions.

But according to Mr Secombe, the payment of super at the same time as wages will be of minimal benefit to employees.  

"$6,000 over your working life of what? 40 years? Doesn't strike me as a big deal.  

"The only people who are going to be better off are the big industry super funds and the ATO [Australian Taxation Office]."  

Between 14 March and 11 April, the government was accepting submissions on the draft legislation through the treasury website.  

Pay day super is not officially law yet.