Payday super is a great reminder to start paying attention to your superannuation
Key takeaways
- Payday super came into effect on 1 July, meaning employers must pay their employees' superannuation on payday.
- Prior to this, employers were able to pay super quarterly, making it easier for people to lose track of how much they were getting paid.
- What's next: It's a great time to check your employer is paying your super correctly and check your super fund's performance.
From 1 July, Australian employers pay their employees' super guarantee (that's 12% of your earnings) on payday instead of every three months.
This means superannuation gets paid earlier and therefore gets invested earlier. And that's a good thing for three reasons.
1. Your super gets invested earlier
Getting super paid more frequently means the money gets invested earlier and has more time to work for you.
And while it's not a massive difference, having your super paid earlier means everyone will retire with more wealth than if they were getting paid super once every three months.
Finder analysis of AFSA data suggests that Australian workers in their 30s or 40s will retire with between $3,000 and $7,000 more thanks to payday super.
Australians currently in their teens or twenties benefit even more. They'll retire with between $9,000 and $12,000 more.
2. It's easier to check you're getting paid super properly
Payday super makes it much easier to track your super payments and make sure your employer isn't underpaying super (or not paying it at all).
And many employers underpay it. Research from the Super Members Council found that Australians missed out on $24.4 billion in super between 2018 and 2023.
It's much harder for employers to underpay (i.e. rob you) when super appears alongside your pay slip.
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3. It helps you keep your retirement in sight
It's easier to care about your retirement savings when your balance grows every fortnight or month along with your salary.
19% of Australians tell Finder they have never reviewed their superannuation fund's performance. Hopefully, payday super is an opportunity to change this.
Make checking your superannuation a regular financial habit. Track how your balance is growing, consider making extra contributions to grow your balance, and make sure your fund is getting a good return (and not overcharging fees).
Super checklist: 4 things you should do right now
- Check your next payslip. Make sure your super is listed there, and check the amount matches what you should be getting paid. The super guarantee is 12% of your ordinary earnings.
- Check the super is in your account. Log into your account and check your super is actually there. And if you don't regularly look at your super, start now. Most super funds have an app, making it even easier to check your balance. It's very motivating watching your super grow.
- Consolidate your funds. If you have more than one super fund you are paying multiple fees and diluting your retirement wealth. Combine them into one. It only takes a few minutes.
- Check your super fund's performance and fees. Compare your super fund to other funds and make sure yours is getting a decent return. Look at the 5 and 10-year returns for a clearer picture. Compare your fund's fees too to make sure you're not overpaying. Finally, consider your current fund's investment option. You may want a higher-risk, higher-growth option, especially if you're young.
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