Payday Super: A Major Change Every Employer Needs to Prepare For

In the most extensive changes to compulsory employer superannuation since being introduced 33 years ago, from 1 July 2026 the way employers pay and report super will fundamentally change.

Bills Introduced to Parliament

The Government’s Payday Super reforms are now one step closer to becoming law and every employer will be affected.

Two key bills were introduced to Parliament on 9 October 2025:

1.     Treasury Laws Amendment (Payday Superannuation) Bill 2025, and
2.    Superannuation Guarantee Charge Amendment Bill 2025.

Together, these bills, once passed, will reshape how and when superannuation is paid, reported and enforced. Employers should start preparing now to ensure their payroll systems and cashflow processes are ready.

What Is Changing?

Under the new rules, superannuation guarantee (SG) contributions must be paid at the same time as employees’ salary and wages. Contributions will need to reach employees’ super funds within seven business days of wages being paid, with some extensions available for first time contributions for new employees, irregular pay cycles and exceptional circumstances.

Employers will also need to report both qualifying earnings and super liability amounts each pay cycle through Single Touch Payroll (STP).

⚠️Important: The ATO Small Business Superannuation Clearing House (SBSCH) has stopped accepting new registrants from 1 October 2025 and will cease operating from 1 July 2026 — the same date payday super is due to commence.

Understanding “Qualifying Earnings”

The legislation introduces a new concept of Qualifying Earnings (QE) as the base on which superannuation must be paid, which broadly includes:

• Ordinary time earnings (OTE)
• Salary Sacrifice super contributions
• Other payments currently counted as salary or wages under the Superannuation Guarantee Administration Act (SGAA)

Changes to Superannuation Guarantee Charge (SGC) Rules

The second bill introduces significant updates to the SGC framework to strengthen compliance and penalties for late or unpaid contributions. Key features include:

• Individual final SG shortfall: Based on QE. Late contributions made before assessment will reduce this shortfall.
• Notional earnings: An interest component compensating employees for lost fund earnings.
• Administrative uplift: Additional charge to cover enforcement costs and promote voluntary disclosure.
• Choice loading: Applies if an employer breaches choice-of-fund rules.
• General interest charge (GIC): Will now apply to the entire SGC amount and is no longer tax-deductible from 1 July 2026.
• Late payment penalty: Applies if SGC remains unpaid 28 days after notice; this penalty is also not deductible.
• Tax deductibility: The SGC itself will become tax-deductible, aligning tax treatment with other employee super payments.‍

Note: The late payment offset will no longer apply to contributions made after 1 July 2026.

Next Steps for Employers

A 1 July 2026 start date is aggressive, giving employers only just over 8 months to be ready. Employers should act now to prepare for payday super:

1. Review and upgrade payroll systems to ensure STP reporting and real-time super payments are possible.
2. Understand the new “qualifying earnings” rules and how they affect SG calculations.
3. Continue to offer choice of fund where required.
4. Plan for cashflow impacts — super will need to be paid more frequently, alongside wages.
5. Ensure payroll staff are trained on the new rules and processes.

The ATO have published draft guidance on their approach to these new rules in their first year of operation.  PCG2025/D5 adopts a risk-based framework to categorise employers into low risk, medium risk and high risk.  Medium and high-risk employers can expect ATO attention.

For more information and resources, refer to the ATO Payday Super Page.

What This Means for Employees

Employees will begin to see super contribution shitting their super funds earlier, improving transparency and compounding benefits over time. More frequent payments mean potentially higher long-term retirement balances.

Talk to Us

These reforms represent the biggest changes to compulsory employer super obligations since their introduction 33 years ago. Our team can help you assess your systems, cashflow, and compliance readiness ahead of the 1 July 2026 start date.

Contact us to discuss how Payday Super may affect your business and how we can assist you to prepare.

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