Payday super: how software providers can lead the way
by Beam
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17/05/2024
The planned introduction of payday super could spell opportunity for software providers who can support their customers with efficient and compliant payroll processes.
From 1 July 2026, proposed payday super legislation is set to come into effect, requiring employers to pay their employees’ super at the same time as their salary and wages.
The government says the introduction of payday super will make millions of Australians better off in retirement and make it easier for the ATO to detect and recover unpaid contributions (of which there were an estimated $3.4 billion in 2019-20).
The 2026 launch is intended to give employers enough time to prepare for the change, but how ready will employers be?
With the increased pressure payday super will place on employers, there’s an opportunity for software providers to support their customers with efficient and compliant payroll processes.
The Institute of Public Accountants has called it one of the biggest changes to the sector since compulsory super began and warned that some businesses might collapse under the strain.
The challenges for many employers can’t be underestimated, as outlined in Beam’s recent whitepaper, The future of super: Payday super and the benefits of payroll integration. According to research from Australian Retirement Trust (ART), nearly 90,000 of the 180,000 employers in the fund pay super on a quarterly basis. More frequent super payments are likely to increase costs and the burden of admin and compliance. So many businesses may need to look at their payroll processes and consider a more streamlined approach
Mathew Gilroy, Founder at Beam and Head of Employer, Platforms and Partnerships at ART, says while the impact on the average Australian business is going to be significant, the solution is clear.
To pay super at the same time as wages, payroll details and super information needs to be connected and integrated as much as possible.
Technology is moving from being an enabler for super to now being essential. So, for software providers, this is a great opportunity.
Mathew Gilroy, Founder of Beam
Time to act
Digital assets can make payday super a success, benefiting employers, super funds and members, says the ANZ
But as highlighted by our whitepaper, software providers need to be proactive to ensure they and their customers, are ready.
Payday super is the latest in a long and ongoing series of changes to the super system. From the introduction of electronic super contributions (SuperStream) in 2014 to Single Touch Payroll (STP) in 2018 and most recently the stapling reform in 2021.
With reforms to super continuing and payday super potentially coming into effect, it’s important for software providers to consider implementing solutions sooner rather than later for customers so they can stay ahead of the competition. An important learning for many software providers during the introduction of STP.
Software providers that support employers with a simple and compliant payroll solution can address the pain points many businesses may have, providing an opportunity to attract new customers for growth as well as building on relationships with existing customers.
“From a software provider’s viewpoint, payday super offers an attractive growth opportunity,” our whitepaper explains. “There’s set to be a significant uptick in demand from businesses that require a seamless and compliant solution to meet the increasing frequency of paying super to employees.”
The step towards an integrated super payment tech
Businesses that would need to make as many as 52 super payments a year instead of four are going to be crying out for a simple, efficient and compliant way to handle payday super. An integrated super payment solution within the payroll software can offer a way to meet this need.
Beam provides a complete super payment tech solution for employers by integrating seamlessly into software platforms. By partnering with Beam, software providers can offer their customers a simple and compliant way to pay their employees super, all within their payroll software platform. This removes the need to login to an external platform separately from their payroll software to upload data needed to pay super. This lightens the workload for employers and gives them time to focus on growing their business.
Gilroy says: “To pay super at the same time as wages, payroll details and super information need to be fully aligned. A payroll-embedded super engine is key to removing the pain points of paying super, and to that end, Beam is a very good solution. It makes super information a natural payroll accrual and then allows you to check the accuracy of data and pay super contributions, all from payroll.”
For software providers, it could be a solution that turns the latest super reform into a positive benefit for themselves and their customers.
Beam is issued by Precision Administration Services Pty Ltd (Precision) (ABN 47 098 977 667, AFSL No. 246 604). Precision is wholly owned by Australian Retirement Trust Pty Ltd (ABN 88 010 720 840, AFSL No. 228 975) as trustee for Australian Retirement Trust (ABN 60 905 115 063). You should consider the relevant Product Disclosure Statement (PDS) before deciding to acquire or continue to hold any financial product. We are committed to respecting your privacy. For a copy of the PDS, please contact your payroll software provider. For a copy of our Privacy Policy, please phone 1800 572 154 or click here.
