Are You Ready For Payday Super?

The Federal Treasury has released draft legislation for "Payday Super", a major change to the superannuation guarantee (SG) system, set to commence on 1 July 2026. These reforms aim to improve the timeliness of super payments and reduce compliance issues for both employers and employees.

What’s Changing?

Currently, employers are required to pay super quarterly. Under the proposed Payday Super regime, SG contributions must be paid within 7 days of each employee's payday - aligning super with wage payments.

Key Highlights:

• Qualifying Earnings (QE): QE will be used to calculate how much SG employees should pay and is made up of ordinary times earnings (OTE), amounts of OTE that have been used as part of a salary sacrifice arrangement for super contributions and other amounts which are currently included in an employee’s salary or wages for SG.
• New Contribution Deadlines: SG must be paid within 7 calendar days after the payday (or 14 days for new employees).
• Annual Cap: The maximum contributions base will now be calculated annually, not quarterly.
• Automated ATO Compliance: The ATO will use payroll and super fund data to automatically detect missed contributions and issue SG charge (SGC) assessments- removing the need for employers to lodge SGC statements.
• Deductibility: Late super payments and SGC will become tax-deductible, but penalties and interest charges will remain non-deductible. Currently late super payments and SGC are not deductible.

Closure of the SBSCH

As part of this reform, the ATO’s free Small Business Superannuation Clearing House (SBSCH) will close on 30 June 2026. From 1 October 2025, new businesses will no longer be able to register for the SBSCH.

Businesses currently using the SBSCH should start planning to transition to alternative super clearing options

Next Steps for Employers

With Payday Super starting in the 2026–27 income year, now is the time to:

• Review your payroll system and processes - can it handle more frequent super contributions?
• Engage with payroll and software providers - will your systems be ready by the transition date? Will it automatically and accurately calculate the super formulas to comply with the new QE definition or will it require manual processing and checking? What is their plan for failed super payments?
• Review your payment method for SG obligations - is the Direct Debit clearance period quick enough? Consider faster payment options like Direct Credit.
• Review your STP reporting - is it accurate? Does your data reconcile? Who is responsible for employee super fund changes?
• Review your cash flow cycles and profit models - can your cashflow support the increased frequency of super payments? Is super properly factored into staff costs for gross profit modelling?
• Review your employee onboarding process - update your onboarding process to capture super choice early and check employee data to ensure this is correct before payments are made.

If you'd like assistance reviewing your current systems or understanding how these changes could impact your business, feel free to get in touch with of our team.