Q&A: Does the frequency of my employer contributions affect my portfolio growth?

Let’s look at Super Guarantee, and that requires that employers make Super Guarantee payments to our Superfunds on a quarterly basis, and it’s essentially 28 days following the end of the quarter. For example, for the July, August, September quarter the contributions must be made by 28th of October and so on. If employers are late, they get penalised and they’re subject to the Super Guarantee Charge. Currently, the Super Guarantee Rules only require quarterly payments.

Employers are, of course, allowed to make more regular payments so long as they meet those quarterly obligations at the worst. Lots of salary sacrifice agreements, some employment contracts cover this and require more frequent contributions to be made. So, check that to see if it’s relevant. But currently, the rules are a quarterly basis.

Now, we have some upcoming changes to the Super Guarantee Rules. Payday Super is the first change I want to refer to. As I mentioned, this legislation, in its draft form was recently release for consultation. My personal view is that I think this is a no-brainer. So, the proposal has the requirement that your super guarantee is paid at the same time as your salary and wages. There might a time frame provided. It’ll be reduced from a quality obligation to a pay cycle requirement. So, to me it is a positive scenario. If you think about how long that money is sitting there not invested and not in the market, it can add significant balances at retirement date. Fingers crossed, it passes and commences from 1 July 2026.

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