Preparing for Payday Super
From 1 July 2026, one of the biggest changes to employer superannuation obligations in recent years will take effect. Known as PaydaySuper, the new rules will require employers to pay their employees' superannuation guarantee (SG) contributions at the same time as wages are paid.
While the changes are designed to improve retirement outcomes for employees, they will require many businesses to review their payroll processes, cash flow management, and super payment systems well before the commencement date.
What is Payday Super?
Currently, employers can make superannuation guarantee payments quarterly, provided the contributions are received by the employee's super fund by the quarterly due dates.
Under the new Payday Super rules, employers will be required to:
- Calculate superannuation on qualifying earnings.
- Pay super at the same time as salary and wages are paid.
- Ensure contributions are received by the employee's super fund within seven business days of payday.
This means super will move from a quarterly obligation to an ongoing payroll obligation.
What's Changing?
More Frequent Super Payments
The most significant change is the payment timing.
Current Rules
- Super can be paid quarterly.
- Contributions must be received by the fund within 28 days after the end of each quarter.
From 1 July 2026
- Super must be paid on payday.
- Contributions must generally be received by the fund within seven business days of payday.
For businesses currently paying super quarterly, this may require significant adjustments to payroll processes and cash flow planning.
New Definition of Earnings
Superannuation guarantee will continue to be calculated at 12%, however it will be based on a new concept called Qualifying Earnings (QE).
Qualifying Earnings will incorporate:
- Ordinary Time Earnings (OTE)
- All commissions
- Salary sacrifice contributions
- Other amounts paid to extended definition employees, including payments to independent contractors
Employers will need to ensure their payroll software and processes correctly identify and calculate QE.
Changes to Penalties and Late Payments
The Super Guarantee Charge (SGC) regime will also change.
Under the new system:
- Late super will be assessed by the ATO.
- Interest will compound daily at the General Interest Charge (GIC) rate.
- Additional administrative penalties may apply to reflect the cost of enforcement and encourage early disclosure by employers. It can be reduced if the ATO hasn't taken action in the past and if the employer lodges a voluntary disclosure statement.
- Penalties will be 25% or 50% of the unpaid super guarantee charge, depending on any prior penalties.
One positive change is that SGC payments are expected tobecome tax deductible under the new rules.
Closure of the Small Business SuperannuationClearing House
The Small Business Superannuation Clearing House (SBSCH) is being phased out.
Key dates include:
- Closed to new users from 1 October 2025.
- Existing users can continue using the service until 30 June 2026.
- The service will no longer be available from 1 July 2026.
Businesses currently using the SBSCH should begin exploring alternative super payment solutions well before the closure date.
How to Prepare Now
Businesses can begin preparing by:
✔Reviewing payroll systems and software capabilities.
✔Assessing cash flow impacts of more frequent super payments.
✔Identifying alternative super payment solutions if currently using the SBSCH.
✔ Ensuring employee super fund records are correct.
Final Thoughts
Payday Super represents a significant shift in employer obligations and will require many businesses to change long-established payroll and superannuation practices.
If you would like assistance reviewing your payroll systems, assessing the cash flow impact, or preparing your business for Payday Super, contact our team.
