Not every boss is playing fair with super

Australians are often told how lucky they are to have the “world’s best” superannuation system that’s the “envy of the world”. 

However, a superannuation industry peak body has found that nearly three million Australians missed out on $5.1 billion in legal super entitlements in 2021-22. 

The average underpayment was $1,800 a worker. 

Under the law, employers must contribute at least 11.5% of their employees' earnings, but one in four workers are missing out. 

That’s the finding of Super Members Council (SMC), a profit-to-member superannuation peak body, which says the problem is getting worse – with Australians losing more money at a higher average. 

SMC says while most businesses are doing the right thing, legislative reform is urgently needed to stop rival firms that are not paying staff their full super entitlements from undercutting them. 

To ensure Australians are paid their super on time and in full, SMC calls on the Australian Government to: 

• Legislate that super must be paid on payday 
• Set unpaid super recovery targets for the ATO 
• Support workers to claim their super after insolvencies.  

Women, people in insecure work, migrant workers, and younger workers are more likely to have unpaid super. 

Men are more likely to work in industries and occupations which have higher rates of underpayment and on average earn more money than women. 

The analysis shows men comprised 56% of affected workers in 2021-22, meaning 1.6 million men missed out on $3.4 billion in unpaid super. 

But the impact on women can be worse as they tend to have lower balances and experience other workplace inequities, which compound with the impacts of unpaid super. 

About 1.3 million women missed out on $1.7 billion in unpaid super. 

Blue-collar workers in construction, trades, and transport were the most likely to miss out on super. 

These coincide with industries that experience higher rates of business insolvencies, where unpaid super is common. 

The Australian Tax Office (ATO) has also identified the retail trade and accommodation food services industries to be in the top three high-risk industries alongside construction in recent years. 

Employers are allowed to pay super just once a quarter. This makes it difficult for workers to track underpayments and harder for the ATO to use its real-time monitoring tools. 

On average, the ATO only collects 15% of the nation’s unpaid super bill a year.  

Unpaid super is often discovered when a business goes bust, making it hard for employees to get back their superannuation. 

The good news is that from 1 July 2026, employers must pay superannuation to their employees at the same time they pay their wages. 

But legislation is yet to be introduced to parliament, and SMC wants the government to pass the reforms during this term of parliament to avoid a continuing mismatch between wages and super. 

Super Members Council chief executive, Misha Schubert, said the current laws rob workers of the benefits of the retirement system and leaves them poorer when they retire. 

“A unified push is needed to stamp it out,” she said. 

“Legislation to pay super on payday, combined with a stronger ATO enforcement regime and better support for workers to claim their super after insolvencies, is crucial to ensure millions of Australians who are currently being short-changed are paid their super on time and in full,” Ms Schubert said.