Payday Super | Is Your Business Ready?
Payday Super reforms take effect from 1 July 2026.
The changes will significantly alter how and when employers pay super guarantee contributions.
Now is the time for employers to start getting ready for the changes to come - here’s what you need to know and how to prepare.
What is Payday Super?
Payday Super requires employers to pay super guarantee contributions at the same time as salary and wage payments. Super contributions must be received by the employee's super fund within seven business days of their payday (unless an extended timeframe applies, such as for new employees). This replaces the current quarterly payment system.
Why the change?
The change was announced as part of the 2023-2024 Budget, with the Treasury describing that it “will strengthen Australia’s superannuation system and help deliver a more dignified retirement to more Australian workers by tackling unpaid superannuation”.
Key intended outcomes include:
- an estimated 8.9 million employees benefiting from higher retirement savings from receiving their superannuation contributions earlier and more frequently;
- deterrence of superannuation theft;
- the ATO being able to take quick action to rectify instances of unpaid superannuation;
- employees being able to better track their entitlements and make it harder for them to be exploited; and
- reduction of liabilities building up on employers’ books.
Other changes to be aware of
Apart from the change to the deadline for super payments, there are some other important changes happening, including that:
- The super guarantee amount must be calculated as 12% of “qualifying earnings” (QE) - this is a new term which includes ordinary time earnings (OTE), salary sacrifice contributions and other amounts that are currently included in an employee's salary or wages for super guarantee.
- You report both QE and super liability through Single Touch Payroll (STP).
- The ATO’s Small Business Superannuation Clearing House (SBSCH) will no longer be available, forcing businesses to adopt new payment methods.
- A revised Superannuation Guarantee Charge (SGC) will penalise late or missing payments.
You can access more details about the changes and other “expected” changes (which are not yet law) here: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/payday-super/about-payday-super
What do Employers need to do?
With the changes starting on 1 July 2026, now is the time for employers to start thinking about how they will manage the transition –particularly cash flow if they have not paid employees as frequently in the past.
We recommend that employers start reviewing their payroll systems and assess their super guarantee processes to ensure readiness. This may include consulting with their payroll software provider, accountant, or a registered tax professional.
The ATO also has helpful resources about the changes on their website to help employers prepare: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/payday-super/payday-super-resources
Getting on top of this early will help to ensure a smooth transition to the new system and reduce compliance risk.
ATO Compliance Approach
The ATO has stated that its compliance approach for the first year of Payday Super will recognise that employers who try to do the right thing, and resolve any issues quickly, will not be the focus of ATO compliance action.
The content of this article is intended to provide a general guide to the subject matter. Advice should be sought about your specific circumstances.
