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The $1700 question: Is your super being paid correctly?

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What if you found out you’d been missing out on a free $1700 a year? Given that’s enough to buy a return flight somewhere nice, cover the kids’ sporting costs for a year, or buy more than 1000 bags of rolled oats, I can imagine you’d be pretty upset. What if it was $30,000 instead? That’s a lot of oats.

Your employer should be paying 12 per cent of your before-tax earnings in super.

Your employer should be paying 12 per cent of your before-tax earnings in super.Credit: Michael Howard

While this is a little bit hyperbolic, $1700 is roughly how much each year affected workers are missing out on due to their bosses not paying their super properly. A recent study from the Super Members Council (SMC) found in 2022/23, 3.3 million Australians missed out on $5.7 billion in super due to their entitlements being unpaid or underpaid.

By the time retirement rolls around, that $1700 can turn into upwards of $30,000, which is a massive deal when the average super balance at retirement age is between $300,000 to $400,000.

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What’s the problem?

This amount is on the up too, with SMC estimating an additional $600 million in super has gone unpaid since last year. Thankfully, there are new laws on the way to help combat this, with the government planning to legislate payday super by next July.

This will force employers to pay superannuation each time they pay their employees’ regular wage, rather than quarterly as current legislation requires (though some employers choose to pay more frequently), with beefed-up penalties for employers who fail to pay within seven days of wages. It will also increase retirement savings, as more regular payments improves the effect of compounding interest.

What you can do about it

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However, these laws aren’t set to come into effect until 2026, and the government is still yet to legislate them. So if you think your super is being underpaid or unpaid, here’s what to do:

  • How to check if you’re being paid what you owe: Currently, the super guarantee is 12 per cent of your before-tax earnings, e.g. your gross pay. However, this only just changed at the start of the month, so if you’re checking payslips from the past financial year, the rate will be 11.5 per cent. If you take your most recent payslip, you can use Moneysmart’s online calculator to determine how much your employer should be paying you over different terms (fortnightly, monthly etc) and cross-reference it with what your employer says they have contributed into your super fund. To make sure that money is actually being paid into your fund, log on to MyGov and go to your ATO portal, where you can see your super account and employer contribution records (your super fund will also have this information). You can then tally up the contributions made over the year and make sure it equates to the correct percentage of your gross pay. For example, if you earn $100,000 before tax, last financial year your super fund should have received $11,500.
  • Why are my employer’s super contributions inconsistent or different amounts? If you check your contributions via MyGov, you might see your employer’s contributions vary each month, sometimes by a few hundred dollars. While this might look alarming, Brooke Logan, UniSuper’s technical and strategy support lead, says this occurs when employers pay super monthly, and will change once the payday super laws are enacted. “Let’s say an employee was paid their salary fortnightly and their employer chose to pay super monthly. In one month, an employee could get paid twice and, in another month, they could have three paydays. This would cause variations in monthly super,” Logan says. “It may also be the case that the employee is a shift or hourly paid worker, where the amount being paid fluctuates based on shift length, timing, penalty rates and other factors, impacting the amount of super that is paid at any given time.”
  • What to do if you think you’re being paid incorrectly: Your first port of call will be raising it with your employer, either with your manager or your company’s finance department, if it has one. Often this will be enough to resolve the problem, as many issues with underpaid super are calculation errors that can be easily fixed. However, if your employer refuses to resolve the issue, or you still think your super is being incorrectly paid, Logan says to take it up with the tax office. “If you still have unpaid super, you can use the ATO online tool to report unpaid super contributions,” she says. “The process can take some time and the ATO will notify you if they successfully collect and pay your unpaid super.” Beyond this, you can also pursue action with the Fair Work Ombudsman or through the courts, though obviously that’s only really suitable for extreme cases.

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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Original URL: https://www.theage.com.au/money/saving/the-1700-question-is-your-super-being-paid-correctly-20250723-p5mhc0.html