From 1 July 2026, a major change called Payday Super will take effect for all Australian employers. Here’s an in-depth look at what’s changing, why it matters, and how to prepare.
What is Payday Super?
Payday Super is a new requirement for employers to pay super guarantee (SG) contributions for eligible employees on every payday, not quarterly. SG contributions must be received by the employee’s super fund within 7 business days of each payday (with some exceptions for new employees). The SG rate will be 12% of “qualifying earnings” (QE)—a new term that combines ordinary time earnings (OTE) with certain other payments.
What’s Changing?
- Timing: Previously, SG contributions were due quarterly (by the 28th of October, January, April, and July). From 1 July 2026, SG contributions must be received by the super fund within 7 business days of each payday. This means super is paid more frequently, improving employees’ retirement savings outcomes and reducing the risk of missed or late payments.
- Calculation: The SG is now calculated as 12% of qualifying earnings (QE), which includes OTE plus other payments. This change means a broader range of payments may attract super, so employers should review their payroll codes and ensure compliance.
- Reporting: Employers must report both QE and SG liability via Single Touch Payroll (STP). This provides the ATO with more timely and detailed data to monitor compliance.
- Super Fund Allocations: Super funds must now allocate or return contributions within 3 business days (previously 20), making it critical for employers to provide accurate data and payments.
- Clearing House: The Small Business Superannuation Clearing House (SBSCH) will close to all users after June 2026. Employers will need to transition to alternative payment methods.
What Employers Should Do
- Review Payroll & Cash Flow: Update payroll systems and business processes to pay super with each pay cycle, and review your cash flow to ensure you can meet more frequent payment obligations.
- Check Employee Super Details: Ensure all employee super fund details are accurate and up to date. Incorrect data may cause payment delays or rejections.
Penalties & Compliance
- SG Charge (SGC): If contributions are not received by the super fund on time, the SGC applies. This includes interest (compounded daily), an administrative uplift based on employer compliance history, and possible penalties. The SGC is now tax deductible.
- ATO Monitoring: The ATO will use enhanced payroll data to monitor compliance. Their approach will support employers making genuine efforts to comply, but penalties will still apply for non-compliance or repeated errors.
Key Dates
- Now: Start preparing—review payroll, cash flow, and super fund details.
- Feb–June 2026: Plan your transition, check your systems, and update processes.
- 1 July 2026: Payday Super becomes law. All SG contributions must be paid on payday and received by the fund within 7 business days.
- 28 July 2026: Final quarterly SG payment due (cannot be late or offset).
Practical Tips
- Don’t wait—align super payments with payroll cycles now to avoid last-minute issues.
- Allow extra time for payment processing and corrections so funds are received on time.
- Stay informed via the ATO website or your adviser for updates and compliance resources.
Further Resources
- Visit ato.gov.au/paydaysuper for detailed guides, checklists, and updates.
- Contact your payroll provider or tax professional for tailored advice.