Nick Bruining: Why new payday super rule could mess up your retirement plans
New ‘payday super’ laws take effect on July 1. But there’s a few traps for workers who pay to retire on June 30 but also want to max out their nest egg contributions.
As the final quarter of the 2025 financial year kicks off, employers are gearing up for major changes to superannuation payment arrangements.
From July 1, employees will no longer have to wait up to 110 days for payments to hit their super accounts. This includes compulsory employer payments and salary-sacrificed contributions.
New “payday super” laws take effect on July 1, putting an end to the current arrangements which permit an employer to defer super fund payments until 28 days after the end of the quarter.
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By continuing you agree to our Terms and Privacy Policy.In simple terms, under the current rules an employer’s 12 per cent compulsory super payment — plus an employee’s voluntary contributions to super — that might have occurred last week don’t need to be paid until July 28.
But from July 1, employers will be legally required to remit the superannuation payments on the same day that employees are paid. If you get paid fortnightly, for example, the boss will be required to make your contributions to super on a fortnightly basis.
While some may dismiss the changes as minor, it can make a big difference to your account balance and financial plans.
The current rules mean that you miss out on any investment returns on the money that’s already been deducted from your pay and being held by the boss. In other cases, it can mess up retirement arrangements for someone that plans to retire on June 30.
Some super funds will effectively freeze the closure of a superannuation fund at retirement until the last employer payment has been received. That could create a problem if you’ve got the new car on order for payment and delivery in early July.
The other issue is for those close to the current annual contribution cap of $30,000 who are hoping to max-out their concessional contributions for this financial year.
Even though the liability to pay superannuation occurs this financial year, unless it is in the super fund and cleared by June 30, the payment will fall into the next financial year.
The easiest way to check what’s likely to happen in your case is to log-in to your super fund’s website and look to see how frequently historical employer contributions were paid. If they are consistently after the quarter ends, you can be reasonably certain that your contribution wouldn’t hit the fund in time.
Checking that and the total contributions received via the myGov website just before the end of the financial year may allow you to do a last-minute top-up to bring you to the $30,000 figure.
You can do that by BPAY and pay the amount or do an electronic transfer.
As long as the money is in and cleared by June 30, you can identify it as a tax deductible concessional contribution at a later date.
That nomination will need to be done before you lodge your tax return for this financial year and you super fund will have the required Australian Taxation Office form for you to fill in.
Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association.
