Unpaid super costs Australians $24.4bn over five years

The Super Members Council is urging Australians to check their super, after new analysis found one in four workers each year were underpaid a shocking total of $24.4 billion over a five-year period from 2018-2023.

New South Wales had the highest total underpayments over those 5 years at a staggering $8.1 billion, while the Northern Territory had the highest average underpayment per person at around $2,140 per year.

From July 1, 2026, payday super laws will come into effect, requiring all employers to pay super at the same time as wages - instead of quarterly. This reform will be a gamechanger to tackle unpaid super.

The Council has championed payday super laws as a key reform to help stamp out unpaid super, coupled with more proactive recovery of unpaid super by the Australian Taxation Office.

SMC’s landmark 2024 report comprehensively highlighted the scale and urgency of the unpaid super challenge, which affects one in four workers and costs them almost $6 billion a year.

Unpaid super compounds losses over time, leaving less well-paid workers with tens of thousands less money to live on in retirement.

The Council’s modelling shows a worker being underpaid $1,730 in super in one year could leave them more than $30,000 poorer at retirement due to the loss of compounding investment returns.

Unpaid super disproportionately affects vulnerable groups. Among the hardest hit workers are women, who already retire with a quarter less super than men. Younger workers, and low-income earners are also at risk: one in two workers who earn under $25,000 a year have unpaid super entitlements.

Payday super will boost transparency for workers – who typically assume their super has been paid along with their wages – and make it much easier and faster to spot and fix underpayments.

The new laws will also make it much easier for employers to stay on top of their cashflow and worker entitlements, and level the playing field for all of the businesses already doing the right thing by their staff.

With digital payroll and single touch payroll reporting systems now available to all employers, many already pay super more frequently than quarterly. As of 2020-21, 56% of all small and medium businesses made super payments more frequently than quarterly. 

The Council welcomes the ATO taking a “pragmatic” and “supportive” approach to compliance for the first 12 months, rather than immediate punitive enforcement where employers are genuinely trying to comply.

“Unpaid super is a silent pay cut that’s cost Australian workers $24.4 billion in just the last five years alone. This is money Australians have earned but never been paid – and it’s leaving millions significantly poorer at retirement,” says Super Members Council CEO Misha Schubert.

“Unpaid super hits hardest where it hurts most – for women, younger workers and people on low incomes. For someone shortchanged just $1,730 in a year, the loss can snowball into more than $30,000 by retirement.”

“Payday super is a game‑changer because it will help to stop unpaid super before it happens. This long-overdue shift to pay super with wages will make any underpayments visible, easier to fix, and far harder to hide – while also levelling the playing field for employers who already do the right thing by their staff.”

Table 1: Total unpaid super by state/territory (5 years to 2022–23)

Source: SMC analysis of ATO 2 per cent sample file, 2018-19 to 2022-23.

Table 2: Average annual unpaid super per underpaid person (5 years to 2022–23)

Source: SMC analysis of ATO 2 per cent sample file, 2018-19 to 2022-23.