- Published
Big changes are coming to the way superannuation is paid in Australia. From 1 July 2026, employers will be required to ensure super contributions are received by employees’ super funds within 7 calendar days of payday, a shift known as ‘Payday Super’. If your business currently pays superannuation quarterly, this could mean significant changes to your payroll processes and software.
This change isn’t just about compliance, it’s about ensuring employees receive their super on time. Right now, many workers are paid weekly or fortnightly, but their super is often paid much later. In fact, an analysis of Australian Taxation Office (ATO) data found that in the year leading up to 30 June 2022, a staggering 2.8 million Australians were underpaid $5.1 billion in super.
Why Payday Super Matters
By aligning super contributions with pay cycles, employees can track their super more easily, and unpaid super issues can be reduced. According to government estimates, a 25 year-old earning a median income could be $6,000 better off at retirement if they receive their super more frequently instead of quarterly.
For businesses, this change means greater scrutiny from the ATO, which is ramping up compliance efforts using Single Touch Payroll (STP) reporting and big data analytics. In 2023–24, ATO audits and enforcement actions led to the collection of $932 million in unpaid super for 797,000 employees.
The ATO will have increased visibility of super contributions, allowing them to proactively identify and address missing or late payments. Employers must ensure timely SG payments or face penalties, and employees will be able to verify that their super is paid on time.
What Employers Need to Know
To prepare for Payday Super, businesses must be aware of key changes coming in July 2026:
- Super contributions must be processed at the same time as salary and wages.
- Employers must ensure that employees’ super funds receive these contributions within 7 calendar days of payday to avoid penalties under the Super Guarantee Charge (SGC).
- Super funds must allocate payments within 3 days or return unprocessed contributions.
- The Super Guarantee (SG) Charge will become tax-deductible and shift to a percentage-based penalty model. However, any penalties and interest applied by the ATO after assessing the SGC will not be tax-deductible.
- Employers will need to show new employees their ‘stapled’ super fund during onboarding.
- The ATO’s Small Business Superannuation Clearing House will close from 1 July 2026, requiring businesses to find alternative payment solutions.
How to Prepare for Payday Super
Even though the legislation hasn’t passed yet, businesses should start preparing now to ensure a smooth transition. Here’s how:
- Review payroll software and processes to handle more frequent super payments.
- Ensure STP reporting is accurate, with super figures matching payroll records.
- Educate internal teams to support necessary payroll system updates.
- Review remuneration policies, especially if using the Maximum Contribution Base or Concessional Caps.
- Plan for the transition period, as the final quarterly super payment for the 2025–26 financial year will likely be due in July 2026.
The Bottom Line
Payday Super is designed to improve superannuation security, transparency, and compliance. While this change may require process adjustments for businesses, it ultimately ensures employees receive their entitlements on time, every time.
By preparing early, your business can stay compliant, avoid penalties, and streamline payroll operations. Start reviewing your payroll processes today to be ready for 1 July 2026.
More information can be found on the ATO website.
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