Important changes to employer superannuation obligations will commence from 1 July 2026.
Under the upcoming Payday Super reforms, employers will be required to pay superannuation guarantee (SG) contributions much more frequently. Rather than making quarterly payments, super contributions will generally need to be paid at the same time employees are paid their salary or wages.
These reforms represent a significant operational and cash-flow change for many businesses. Employers should therefore review the implementation guidance provided by the Australian Taxation Office to ensure they are prepared.
Key changes
Under the new rules, SG contributions must be received by an employee’s nominated superannuation fund within seven business days of payday. Certain circumstances, including new employee commencements, may allow slightly longer processing timeframes.
The contribution will be calculated at 12% of an employee’s ‘qualifying earnings’, a new concept that broadens the current definition of ordinary time earnings.
Where super contributions are not paid in full, on time, or to the correct fund, the super guarantee charge (SGC) may apply.
Preparing your business
The ATO recommends that employers begin preparing now to ensure a smooth transition. Key considerations include:
- Determining when your business will adopt Payday Super.
- Assessing your cash flow to accommodate the shift from quarterly to more frequent payments.
- Reviewing payroll and administrative processes, including confirming that all employee super fund details are accurate and up to date.
System readiness
Prior to implementation, ensure that all relevant systems are configured correctly. This includes payroll software, superannuation clearing services and any portals used to submit SG contributions.
Employers using the Small Business Superannuation Clearing House should also be aware that the service will close permanently from 1 July 2026 as part of the reform package.
It is also prudent to review internal procedures to ensure any payment errors can be identified and corrected promptly.
Final reminder: From 1 July 2026, Payday Super will be compulsory.
Businesses that do not comply with the new payment requirements and continue making quarterly contributions may be subject to compliance action by the ATO.
If you would like assistance reviewing your payroll processes or preparing for these changes, please contact us. We can help ensure your systems and procedures are ready ahead of the commencement date.
