Federal Budget: Workers to be paid super at the same time as wages from 2026

Workers will get their superannuation entitlements paid with their wages from 2026, in a bid to crack down on underpayments by businesses.

Australians will be paid super at the same time as their wages from 2026 in a move to crackdown on underpayments.

Workers will get their superannuation entitlements paid with their wages from July 1, 2026, in a bid to crack down on underpayments.

The shift from the current regime, where employers are only required to pay super on a quarterly basis, is expected to benefit lower-paid and casual workers who are more likely to miss out when their super is paid less often.

The move comes as the government reaffirmed its plans to double the tax on earnings on super funds over $3m, from 15 per cent to 30 per cent, estimating that will bring in an extra $2.3bn in receipts in its first full year of operation in 2027-28.

But the superannuation industry will be relieved to see that the Albanese government’s second budget stuck to its promises of introducing no more new taxes to super or changes in the system in its current parliamentary term.

The move to align the payment of super with wages will be reinforced by an extra $40m for the Australian Taxation Office to crack down on underpayment of super.

The government estimates that the changes will improve retirement outcomes for about 8.9 million workers.

It said the shift to align super payments with wages from 2026 would give employers time to upgrade their payroll systems and make the necessary adjustments to cash flow.

The budget papers estimate that the increased frequency of super payments will bring in an extra $835m in receipts and decrease payments by $243m in the five years from 2022-23.

Announcing the change, the government said the move would “ensure the employees have greater visibility over whether their entitlements have been paid” and better enable the ATO to recover unpaid super.

The budget papers show that the government has no plans to back off or modify its proposal to double the tax rate on earnings of super funds worth more than $3m – a proposal that will introduce the taxation of unrealised gains into the tax system for the first time.

The self-managed superannuation sector, which will be the hardest hit by the change, has been lobbying for some modifications to the proposals which were announced by Treasurer Jim Chalmers earlier this year.

The SMSF Association has called on the government to index the $3m figure and drop plans to tax unrealised gains for funds over $3m. However, the government is pushing ahead with the changes as originally announced, which are set to come into force from July 1, 2025, after the next election.

It said the new superannuation tax was one of a several “modest but meaningful” revenue measures in the budget, arguing that it would only affect about 80,000 people in 2025-26.

It also reaffirmed plans that the tax increase would be applied to defined super payments on a comparable basis.

The government said the measure was “consistent with its proposed objective of superannuation to deliver income for a dignified retirement in an equitable and sustainable way”.

The government estimates that the measures on funds of more than $3m will increase receipts by $950m over the five years from 2022-23. This will be partly offset by an associated increase in payments of $47.6m.

The government also reaffirmed in the budget that it had no plans to cap the total amount which could be put into super or change the current rules around contributions.

Originally published as Federal Budget: Workers to be paid super at the same time as wages from 2026