Under these changes, the moment an employee receives their Ordinary Time Earnings (OTE) payment will trigger a seven-day deadline for the corresponding superannuation contributions to reach the employee's superfund. This window accounts for the fund's movement through the payment system and various clearing houses.
Employers who fail to meet this seven-day deadline will be subject to the Superannuation Guarantee (SG) charge. This regulatory measure also comes with a handful of exemptions designed to accommodate nuances in payment schedules.
Specifically, the limited exceptions are:
- For OTE disbursements within the first two weeks of employment for a new hire, the contribution deadline is extended to the conclusion of this two-week period.
- Small or irregular payments that fall outside an employee's normal pay cycle will not be treated as "payday" events until the next regular OTE payment is made.
According to a study conducted by the Super Members Council, adopting the payday super model could significantly benefit employees. The average worker could see an increase of approximately $7700 in their retirement savings, owing to earlier accumulation and compounding returns. This financial uplift underscores the broader benefits of more frequent superannuation contributions.
This shift in payment schedule coincides with an anticipated increase in the SG contribution rate, which is projected to climb to 12 percent by July 1, 2025. Originally reported by an analysis from the Super Members Council, these measures reflect ongoing efforts to bolster the retirement income of employees by ensuring contributions are deposited more expediently.
