Payday Super is Here
- Nijo Antony
- 6 days ago
- 4 min read
From 1 July 2026, all Australian employers will be required to pay superannuation at the same time as wages are paid. This major reform, known as Payday Super, has officially passed through Parliament and will fundamentally change how and when you pay superannuation to your employees.
Below we’ve summarised what you need to know and how to get ready.
What is Payday Super?
Payday Super requires employers to pay Superannuation Guarantee (SG) contributions each payday, not quarterly. Super payments must now reach employees’ super funds within seven business days of payday (called the Qualifying Earnings day or QE day).
Why is it being introduced?
The government’s goal is to:
Improve workers’ retirement savings (workers could be around 1.5% better off at retirement)
Reduce the $5.2 billion in unpaid super each year
Give the ATO faster visibility to detect and recover unpaid or late super.
It also smooths cash flow for employers by making super a routine payroll item instead of a quarterly lump sum.
What payments are covered?
Payday Super applies to all standard Super Guarantee contributions, including:
Ordinary Time Earnings (OTE)
Salary-sacrificed super contributions
Other payments currently included in “salary or wages” for SG purposes
What’s changing in timing?
There are a few limited exceptions:
New employees - you have 20 business days after their first payday to make the first contribution.
Out-of-cycle payments (e.g. bonuses or commissions) may be included with the next regular pay cycle.
In exceptional circumstances, the ATO can extend deadlines in the event of natural disasters or system outages.
Key Dates
Penalties and Superannuation Guarantee Charge (SGC)
Even if you pay late by only a few days, you may still be liable for the SGC. Under the new rules, SGC includes:
SG shortfall - the unpaid super.
Notional earnings - daily compounding interest on unpaid amounts.
Administrative uplift - 60 % of the shortfall + interest (deductible if voluntarily disclosed).
Choice loading - 25 % penalty (up to $1,200) if fund choice rules aren’t followed.
Late-payment penalty - 25 % (or 50 % for repeat breaches) if SGC remains unpaid after notice.
Employers can claim a deduction for the shortfall and voluntary uplift but not for penalties or ATO-assessed interest.
ATO compliance approach (2026-27)
The ATO’s draft PCG 2025/D5 confirms a practical approach during the first year:
Low Risk: You attempt to pay on time, correct any fund rejections quickly, and end up with no outstanding super - no ATO action.
Medium Risk: You pay in full but still on a quarterly schedule - ATO may review.
High Risk: You have unpaid or underpaid super - ATO will investigate and apply penalties.
From 1 July 2027, all employers must be fully compliant.
“Qualifying Earnings” - A new term
The law introduces Qualifying Earnings (QE) to replace the old mix of “Ordinary Time Earnings” and “salary or wages” used in SGC calculations.
QE includes:
Ordinary Time Earnings (unchanged)
Salary-sacrificed super contributions
Certain other earnings that previously fell under “salary or wages”
The change simplifies calculations and ensures both SG contributions and SGC assessments use the same earnings base.
Software, STP and Data Changes
Single Touch Payroll (STP) will be updated to capture payday super data automatically.
SuperStream will support instant payments via the New Payments Platform (NPP) by 1 July 2026.
Improved error messaging and member-verification tools will reduce rejected payments.
Payroll software providers must deliver updates by 1 July 2026, so employers should confirm upgrade timelines early.
Small Business Super Clearing House (SBSCH) closure
Over 200,000 small employers currently use the ATO’s SBSCH. It will:
Close to new employers on 1 October 2025, and
Shut down for all users on 1 July 2026.
Employers should transition to a super fund portal, Beam/PaySuper service, or an integrated payroll platform before the closure.
Concessions and Exemptions
The 20-business-day concession for new employees remains.
Shortfall Exemption Certificates will continue for employees likely to exceed their concessional contributions cap (e.g., with multiple employers).
The Maximum Contributions Base will apply annually, not quarterly.
How to prepare now
Review payroll systems: Confirm your software can process super contributions each pay run.
Check your data: Clean up employee TFNs and super details to avoid rejected payments.
Plan for cash-flow impacts: Paying super more frequently changes working-capital timing.
Update onboarding processes: Capture super choice details on day one and use ATO stapled-fund services.
Educate your team: Finance, payroll, and HR staff should understand the seven-day rule and new ATO reporting.
Need help getting ready?
Payday Super is a significant compliance change that will affect every employer, from small family businesses to large enterprises.
WLW Group can help you:
Review payroll and cash-flow impacts,
Liaise with your software provider, and
Prepare step-by-step implementation plans before 1 July 2026.
Contact our team to schedule a review of your payroll systems and ensure you’re ready well before the new rules take effect.
Nijo Antony
Director