From 01 July 2026, the way you pay your employees’ super is changing. Instead of making quarterly super payments to your employees’ funds, contributions will essentially need to be paid at the same time as salary and wages.
‘Payday Super’ marks a significant change for employers. To make sure your business isn’t caught out, make sure you’ve taken the following readiness steps, in line with ATO guidance.
Understand the new requirements
Under the new regime, super guarantee payments must reach your employees’ super funds within seven business days of payday.
This means the payment must be received by the super fund and is abled to be allocated to the employees fund, and not the pay the payment is made. Longer deadlines apply in some cases, such as 20 business days for new employees, rehiring past employees or an existing employee changing funds. The amount of contribution is calculated as 12% of an employee’s ‘qualifying earnings’ – a new term that incorporates and expands on the previous concept of ordinary time earnings.
If contributions are not made on time, in full and to the correct fund, the super guarantee charge (SGC) may apply.
Plan your transition
The ATO recommends that employers do the work now to plan and prepare for Payday Super. This includes:
- Deciding when, exactly, your business will move to Payday Super (noting early adoption is perfectly fine).
- Reviewing your cash flow position, to make sure your business can cope with a shift away from quarterly to ‘real-time’ super payments.
Reviewing your payroll systems and procedures is also an important step to ensuring your business is ready for these additional administrative requirements. Some of the things you might have to look at:-
- Onboarding process. Make sure Standard Choice Form is provided to new employees and is returned promptly.
- Make sure you have a complying "Default Fund" in place.
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Consider who will process and/or approve super payments when key payroll staff are absent.
People with weekly payroll cycles will need to make up to 48 more super payments. Employers may wish to consider changing the pay frequency of their employees, subject to Employee Awards and Fair Work requirements.
Contact us if you have any concerns about how Payday Super may impact you or your business.
Lock in plans
Once your business has determined when it will start using Payday Super, the next step is to make sure all relevant systems are ready for the change. That includes the payroll software you use, as well as any clearing houses or super fund portals you may use to make super guarantee contributions.
For any businesses that use the Small Business Superannuation Clearing House (SBSCH), remember that it will close permanently from 01 July 2026 as part of the Payday Super reforms.
Finally, take the time to troubleshoot any potential issues that might arise once Payday Super is live. For example, your business may need to implement a process quickly to correct any errors that might arise when paying employees’ super contributions.
Software changes will likely be required to facilitate updated reporting for Payday super via Single Touch Payroll (“STP”) – The ATO is still providing guidance to Software Developers about the format of these changes. Look out for communication from the provider of your payroll software solution for communication about actions that may be required before 01 July 2026.
More information and resources
Remember, from 01 July 2026…
Payday Super is mandatory, any businesses that do not adapt to the new rules and continue to pay super quarterly run the risk of being on the receiving end of compliance action by the ATO.
If your business needs help preparing for Payday Super, feel free to reach out to a member of our team. We can walk you through the requirements of the new legislation and troubleshoot any potential pitfalls well ahead of 01 July.
