Payday Super for Employers & Employees

What is Payday Super?

Payday Super requires employers to pay superannuation guarantee at the same time as salary and wages.

Superannuation Guarantee (SG) is the compulsory contribution that employers must pay into an employee’s super fund. It is calculated as a percentage (12% as of 1 July 2025) of an employee’s Qualifying Earnings (QE).

Qualifying Earnings from the 1st of July 2026 will replace the prior concept of Ordinary Time Earnings. Qualifying Earnings will include:

• Ordinary Time Earnings
• Commissions & Bonus’s
• Director Fees
• Salary Sacrifice amounts to superannuation (unless in regards to parental leave or overtime)

Why is Payday Super being introduced?

The Australian Taxation Office (ATO) and Federal Government aim to:

• Reduce unpaid or late super
• Improve the accuracy and timeliness of reporting
• Help super balances grow faster through earlier compounding
• Align super with modern payroll systems using Single Touch Payroll (STP)

When does Payday Super start?

Payday super is law from 1 July 2026. 

It can be opted sooner rather than later!

From this date, the quarterly SG deadlines no longer apply and the Australian Taxation Office (ATO) Small Business Superannuation Clearing House will permanently close. 

What happens to the June quarter (Q4) super payments in 2026?

Q4 2026 (covering April–June) is a critical transition period.

Q4 SG is still allowed to be paid quarterly before 28 July 2026 under current rules, but could have implications on payday super payments commencing from 1st of July 2026. 

Reasons to bring forward Q4 payments forward:

• To avoid late payments
• To avoid exceeding concessional caps. 
• To avoid Superannuation Guarantee Charge (SGC)
• To reduce cash flow pressure from overlapping obligations
• To make use of the ATO Small Business Superannuation Clearing House before it ceases operation on 30 June 2026.

How will Payday Super impact concessional contribution caps?

Concessional contributions include:

• Employer Super Guarantee contributions
• Salary sacrifice contributions
• Personal deductible contributions

Under Payday Super, superannuation contributions will be made more regularly, reducing the likelihood of prior‑year super payments being carried into the following financial year.

If the June quarter (Q4) 2026 super contributions are paid in July 2026, they will be counted in the 2027 financial year. This may increase the risk of exceeding concessional contribution caps and triggering Division 293 tax consequences.

What payroll changes do employers need to make?

Employers should review and be on top of:

• Pay run frequency (weekly, fortnightly, monthly)
• SG payment and approval processes
• Clearing house timing (some take multiple days)
• Payroll software settings to ensure super is processed automatically
• STP reporting accuracy so the ATO can match payments to wages

How will payday super affect business cash flow?

Under payday super, superannuation will be paid in line with each payroll cycle (weekly, fortnightly, monthly, etc.), resulting in more frequent payments that will: 

• Reduce the buffer period businesses are used to
• Require changes to cash flow management and budgeting

What happens if super is paid late?

Payday super will require SG contributions to be received by employees’ super funds within 7 business days after payday. 

There are concessions for new employees. To accommodate onboarding new employees, funds must be received within 20 business days of their first payday. 

If not, late payments will have consequences. 

• Superannuation Guarantee Charge (SGC)

• Payments not being tax deductible
• Administrative penalties
• Additional reporting to the ATO
• Time-consuming reconciliation and corrections

What role does Single Touch Payroll (STP) play?

STP enables the Australian Taxation Office (ATO) to:

• Compare wage payments to SG contributions easily
• Detect unpaid or late super sooner
• Ensure employees’ super funds receive accurate and timely data
• Improve overall system integrity

As a result, it will be important that STP submissions are true and correct. 

Do contractors need to be included?

If a contractor is considered an employee for SG purposes, payday super rules will apply. 

Will payroll software update automatically for payday super?

Most payroll platforms (e.g., Xero, MYOB, QuickBooks) will be working to comply with Payday Super requirements. It will be important to stay up to date with payroll software updates/changes to ensure ongoing compliance.

What should employers be doing now—before 1 July 2026?

Murray Nankivell recommends businesses prepare by:

• Reviewing super payment timing
  Understand current SG processes and how they will change under payday obligations.
  
• Identifying employees at risk of cap or Division 293 impacts
  High-income earners or those close to the concessional cap may require monitoring.
  
• Assessing payroll systems and workflows
  Confirm software capabilities, approval processes, and clearing house timings.
  
• Modelling cash flow adjustments
  More frequent SG payments may require revised cash flow planning.
  
• Checking contractor classifications
  Ensure SG obligations are correctly applied under the new timing rules.
  
• Preparing internal communications
  Ensure payroll, HR, and finance teams understand the new obligations and timelines.
  
• Making use of the resources available by the Australian Taxation Office (ATO)

‍For any questions, contact us:
Naracoorte: 📞 8765 7777
Bordertown: 📞 8752 8888
Murray Bridge: 📞 8535 5999