There is just over $21.2 billion in lost and unclaimed superannuation sitting across nearly 7.5 million accounts, and the ATO has spent Tax Time 2026 pushing people to go and find theirs. Most of the coverage has been aimed at the individual: log in to myGov, claim your money, good news story.
Almost none of it asks the more uncomfortable question. Where did 7.5 million orphaned super accounts actually come from?
A very large share of them were created by employers - and construction creates them faster than almost any other industry. High turnover, apprentices, casuals through the busy season, labour hire, and crews that change between projects. Every new starter is a chance to open a duplicate account, and since 1 November 2021, doing so has been a breach.
This article works through the employer side first, because that is where the money and the risk sit. Your own lost super is at the end, and it will take you five minutes.
Why Construction Is Over-Represented
Lost super is a churn problem, and construction churns. Four patterns show up again and again in the books we see:
- Apprentices and first jobs. A first-year apprentice often has no fund, then accumulates one at every employer they pass through. By the time they finish their trade they can be carrying three or four accounts, each with an insurance premium eating a small balance.
- Seasonal and project-based hiring. Crews scale up for a project and down again. Short stints create small balances, and small balances are exactly what get transferred to the ATO as inactive.
- Onboarding under pressure. A new labourer starts Monday because someone left Friday. The choice of fund form does not come back, and payroll defaults them into the company fund to get the pay run out.
- Address and name changes. Workers who move often lose contact with old funds. The fund cannot find them, and the account goes to the ATO.
None of these are dishonest. They are what a busy business looks like. But the third one is a compliance breach with a price attached.
The Step That Creates Lost Super: Stapling
Since 1 November 2021, you cannot default a new employee into your business's preferred fund just because they did not nominate one. Every worker now has a stapled super fund - the existing account that follows them from job to job - and if they do not choose, you must find it and pay into it.
The obligation is on you to ask, not on the employee to tell you.
What you must actually do for every new starter
- Offer a genuine choice of super fund when they start
- If they nominate a fund, pay into it - you are done
- If they do not, request their stapled fund details from the ATO before you pay any super
- Request it through ATO online services for business (Employee super account) or through your payroll software - you need a TFN declaration or an STP pay event lodged first
- Only if the ATO confirms there is no stapled fund can you use your default fund
- Keep the record of the request. The request is your evidence that you did the right thing
Make it part of onboarding, not an exception. On a site where people start at short notice, anything that depends on someone remembering will eventually not happen. The stapled fund request belongs on the same checklist as the TFN declaration and the white card.
The Subcontractor Question Underneath It
There is a second, larger version of this problem that is specific to construction: paying super to people you think of as subcontractors.
Under section 12(3) of the Superannuation Guarantee (Administration) Act, an individual you engage under a contract that is wholly or principally for their labour is treated as an employee for super purposes - even though they are a genuine contractor for every other purpose, and even though they hold an ABN.
The rough test is whether you are paying for a person's time or for a result. A chippy engaged by the hour, who does the work personally, cannot send a substitute, and supplies little more than their own tools, is a long way toward being caught. A subcontractor engaged to complete a defined scope for a fixed price, who can put someone else on it and carries their own risk, generally is not.
Two points that catch builders out:
- An ABN proves nothing. Neither does an invoice, or the fact that you both agreed they were a contractor. The test looks at the substance of the arrangement.
- Contracting with a company, trust or partnership is different. Section 12(3) applies to individuals. Where the contract is genuinely with an incorporated entity, it generally falls outside it - but that does not rescue an arrangement that is really employment wearing a company hat.
Recent tribunal decisions have also unsettled the old assumption that an hourly rate automatically means a labour contract. That cuts both ways, and it means the honest answer for a lot of arrangements is "this needs looking at properly" rather than a rule of thumb.
Why this one is expensive: if the ATO decides a subcontractor should have been receiving super, the liability is backdated. You cannot recover it from the worker, you cannot deduct the penalty components, and it applies across every similar worker you engaged the same way - which in construction is rarely just one person.
What It Costs to Get This Wrong in 2026
The stakes rose on 1 July 2026 when payday super commenced. Super now has to reach the fund within 7 business days of payday, and the ATO matches Single Touch Payroll data against fund reporting close to real time. A problem that used to surface at a quarterly deadline - or years later in an audit - now surfaces in weeks.
Paying into the wrong fund is a breach of the choice of fund rules. Under the new super guarantee charge that attracts a choice loading of 25% of the contributions for the affected payday, capped at $1,200 per notice period. That sits on top of:
- The shortfall itself, calculated at 12% of qualifying earnings
- Notional earnings - interest at the general interest charge rate, compounded daily
- An administrative uplift of up to 60% of the shortfall and notional earnings combined
The lever most builders do not know about
That 60% uplift is not fixed. It reduces by 20 percentage points where there has been no ATO assessment against you in the previous two years, and by up to a further 40 points for voluntary disclosure - potentially to nothing.
Read that again if you have a nagging feeling about a few workers. The difference between telling the ATO and being found by the ATO is a large number, and it only runs in one direction.
A Five-Minute Self-Check
- Have you put anyone on since November 2021 who did not return a choice of fund form?
- Could you produce evidence of a stapled fund request for each of them?
- Does your onboarding pack require it, or does it depend on someone remembering?
- Are member numbers, USIs and fund ABNs current for everyone - or are contributions bouncing back?
- Since 1 July, is super actually landing in the fund within 7 business days, or just leaving your account within 7 business days?
- Of the people you pay on invoice, how many are individuals working by the hour, personally, with no right to send someone else?
The second-to-last one catches more businesses than any other. "Paid" means received and able to be allocated by the fund. Sent is not paid.
Now Check Your Own
With the business side handled, the personal one takes five minutes. If you came up through a trade, changed employers a few times as a young bloke, or worked casually before you started the business, there is a decent chance some of that $21.2 billion has your name on it.
- Log in to myGov and make sure the ATO is linked
- Go to Super, then Fund details
- Review every account listed, including ones you had forgotten
- Check ATO-held super separately - that money is not invested and is not compounding, so it is the pool worth moving first
The ATO app does the same thing, or you can call 13 28 65 with your TFN. It is free. Commercial "super finder" services charge for a search you can run yourself, and the ATO warns against paying for it.
Before you consolidate, check your insurance. This matters more in construction than in almost any other industry. Older super accounts often carry life, TPD or income protection cover issued without underwriting. Close the account and the cover goes with it - and if you work in a high-risk occupation, or your health has changed since the policy was written, you may not be able to replace it at any price. Check what you would be giving up, with a licensed financial adviser, before you roll anything over.
Frequently Asked Questions
Do I have to request a stapled super fund for every new employee?
Only where the employee does not choose a fund themselves. You must first offer a genuine choice of fund. If they nominate one, pay into it. If they do not, you must request their stapled fund details from the ATO before paying super, and you can only use your default fund if the ATO confirms they have no stapled fund.
Do I have to pay super to my subcontractors?
Sometimes. Where you engage an individual under a contract that is wholly or principally for their labour, they are treated as an employee for super purposes under section 12(3) of the Superannuation Guarantee (Administration) Act, regardless of whether they hold an ABN or invoice you. The test looks at whether you are paying for a person's time or for a result, and whether the work must be done personally. Contracts genuinely with a company, trust or partnership generally fall outside the provision.
What is the penalty for paying super into the wrong fund?
It is a breach of the choice of fund rules and triggers a choice loading of 25% of the contributions for the affected payday, capped at $1,200 per notice period. That is charged on top of the shortfall, notional earnings compounding daily, and an administrative uplift of up to 60% of the shortfall and notional earnings combined.
Can I reduce the penalty if I find a problem myself?
Yes. The administrative uplift reduces by 20 percentage points where there has been no ATO assessment against you in the previous two years, and by up to a further 40 percentage points for voluntary disclosure, potentially reducing it to nil. Disclosing before the ATO finds the issue is worth a significant amount of money.
How do I find my own lost super?
Log in to myGov, link the ATO, then go to Super and select Fund details. That lists every super account reported to the ATO in your name, plus any super the ATO is holding for you. It is free, it takes about five minutes, and you can do the same thing in the ATO app or by calling the ATO on 13 28 65.
The Short Version
Go and claim your own lost super this week, and tell your crew to do the same - it is a genuinely good thing to put in front of an apprentice.
But the expensive half of this story is on the other side of the ledger. Every one of those 7.5 million orphaned accounts started somewhere, and in construction a meaningful share started with an onboarding process that skipped a step under pressure. If you cannot confidently answer the six questions above, that is worth an hour now - particularly while voluntary disclosure still knocks the uplift down.
If you want the stapling, contractor classification and payday super side of your payroll reviewed properly, that is exactly the work we do for Perth builders, developers and trades. Book a free consultation and we will tell you where you stand.
Disclaimer: This article provides general information only and does not constitute professional tax, legal or financial advice. Every business situation is different. Please consult a qualified adviser before making decisions based on this content.