Payday super – a recently announced change to how employers pay their employees superannuation – will bring operational and financial implications for employers but also creates an opportunity for schools to engage employees about super and financial wellbeing, according to education industry super fund NGS Super.
Compulsory payday super was announced in May as part of the 2023 Federal Budget, requiring employers to pay employees superannuation contributions at the same time as their salary and wage, instead of quarterly.
NGS is helping schools to understand the change, prepare to minimise disruption and cost, and maximise the opportunity to strengthen employee engagement and retention by supporting staff to be confident about super and be financially fit for the future.
How payday super will affect schools and employees
According to Natalie Previtera, NGS Super CEO, schools may need to manage their cashflows differently to ensure super contribution funds are available each pay day, noting that salaries can make up as much as 75% of a schools’ running costs and super is increasing to 11% this year.
“Pay run is already a busy time for school finance teams, so requiring super payments to be made at the same time can mean extra planning for employers to stay on top of their obligations,” said Previtera.
Employers have until July 2026 to start paying employees super with their pay cycle, but NGS believes making the change as soon as possible will help schools position themselves as an employer of choice.
For employees, the change will see them benefit from the compounding returns on their investment and help them to keep track of their overall super savings.
Industry Super Australia has commissioned modelling that demonstrates that a 30-year-old earning the age-based median wage could be $8,000 better off at retirement if paid super fortnightly instead of quarterly.1 This is because contributions would compound for longer if paid more frequently.2
Super sessions for staff
“Payday super is a business change that employers have to make, it’s not optional. We want to help our school partners understand what it means for them and help them through the change,” said Previtera.
“But we also want to go one step further and help schools use the change as a trigger to engage with their staff about their superannuation. Providing education sessions for staff on superannuation and what these changes may mean for their future is a proactive benefit schools can offer at a time when staff retention and attraction is particularly challenging.
“Payday super is a good news story for all workers, and it will particularly help casual workers and women. It gives employers the opportunity to share good news with employees,” said Previtera.
Supporting a dignified retirement for teachers
Payday super will also help protect both employers and employees to ensure super entitlements are paid to casual workers. Almost 40% of women in their 20s who earned less than $25,000 missed out on an average of $570 a year.3 The impact of unpaid super for the individual can be substantial, and it is important this risk is mitigated by employers.
If an employer does not pay or underpays super, whether now or from the 2026 change, they face the super guarantee charge. The super guarantee charge (SGC) is a fine issued by the ATO that employers need to pay for incorrect, unpaid or late super payments. If a business fails to pay the SGC, the ATO can take stronger action, including issuing an ATO penalty notice.
“Helping your staff improve their financial wellbeing can have a positive impact on employee engagement and general wellbeing, which is a win-win for everyone. The payday super changes offer the chance to start a conversation with staff about super and their financial future,” Previtera said.
This article originally appeared as a media release from NGS Super.