Login
iscover
Governance and error handling processes will need to be overhauled to ensure super is paid at the same time as salary and wages, a deputy commissioner says.
Newsletter
ATO primes funds, businesses for payday super rollout
22 November 2024
•
12 minute read
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The ATO has told superannuation funds and businesses to gear up for the rollout of payday super, warning “everything will need to work faster” to comply with its tighter processing timeframes.
The switch to payday super gives employers a seven-day window for contributions to arrive in employees’ funds, and super funds three days to return payments that are unable to be allocated.
In a speech at AFSA’s annual conference this week, deputy commissioner Emma Rosenzweig said the changes were a “once-in-a-generation” opportunity to modernise the super guarantee environment.
But with the government setting a deadline of 1 July 2026, it also meant the super industry had to “do a lot now to prepare”.
“Payday super means everything will need to work faster,” she said.
“This is a nearly $4 trillion industry, and it’s expected that all stakeholders invest to ensure employers meet their obligations.”
==
==
“The biggest mistake you can make is to think that payday super is an employer problem.”
Rosenzweig said around one-quarter of workers currently have their SG paid quarterly, while 49 percent were paid monthly and 17 per cent fortnightly.
But when it came to salary and wages, 14 per cent employees were paid monthly, 54 per cent were paid fortnightly and 30 per cent were paid weekly.
“While the vast majority of workers are getting their SG more regularly than the minimum quarterly now, payday super is still going to drive significant change for funds in the pattern of receiving contributions,” she said.
Governance and error handling protocols would need to be readied for the change, as “many of these manual processes will no longer be viable”, she said.
“Your systems and processes will have to be able to handle the volume and speed of payday super, including the need to resolve errors quickly to ensure that employers can meet their obligation to get contributions to funds within seven days of payday.”
The Tax Office was also investing in its own data-matching systems to ensure compliance with payday super laws, and would be “increasingly proactive” with businesses who failed to meet their obligations.
The ATO estimates that unpaid super totals $5.1 billion every year.
In the lead-up to the 2026 payday super deadline, it said it would be holding working groups for industry members to participate in technical discussions and workshops.
You are not authorised to post comments.
Comments will undergo moderation before they get published.