Upcoming super payment reforms will change the way payday operates for your business. But having all the info at hand can have you ready to (pay)roll by 1 July 2026.
What to Expect from Payday Super
The Australian Government is making some significant changes to the way employers pay superannuation. From 1 July 2026, employers will need to pay super guarantee (SG) contributions at the same time as wages.
Dubbed “payday super,” this change is being implemented to help Aussies retire with more, by quickly getting those funds into their super fund.
Payday super changes mean that employers will pay super contributions with employees’ ordinary time earnings (OTE), eliminating the traditional quarterly payment cycle.
Here are the key details at a glance:
- New due date: Employers must make SG contributions within 7 days of payday.
- Penalties for delays: Failing to meet this deadline will result in an updated Super Guarantee Charge (SGC) being applied.
- Reporting changes: Through Single Touch Payroll (STP), employers must report both OTE and total super liability.
Penalties for Missing Deadlines
Penalties for missing super contribution deadlines are set to be tougher than before. The updated SGC is designed to encourage compliance while compensating employees for late payments.
Here’s a breakdown of what the SGC includes:
- Outstanding SG shortfall: This covers any unpaid super contributions, calculated based on OTE.
- Notional earnings: An interest component ensures employees aren’t financially disadvantaged by delayed payments.
- Administrative uplift: An extra fee to cover the cost of enforcement.
Additional penalties can apply, once SGC is assessed:
- A General Interest Charge continues to accrue daily on outstanding SGC shortfall and notional earnings, at the ‘general interest rate’.
- A SGC payment penalty totalling up to 50% of the unpaid SGC amount can apply if employees don’t pay within 28 days.
The silver lining? SGC payments will now be tax-deductible, except for interest and penalties accrued after the SGC assessment.
But avoiding having to pay fees and penalties in the first place is the better option. That’s why it’s a good idea to be prepared before the changes kick in.
How to Prepare for Payday Super
Payday super marks a significant shift in the way superannuation is managed and will most likely require changes to your employee payment process. By preparing now, you can create a smooth transition for the 1 July 2026 deadline.
1. Update Payroll Systems:
Ensure your payroll software can handle the increased frequency of super payments. Many modern solutions integrate seamlessly with STP.
2. Transition from the Small Business Clearing House:
For small businesses relying on the Small Business Superannuation Clearing House (SBSCH), note that it will be decommissioned from 1 July 2026. So it’s a good idea to start exploring commercial alternatives that fit your needs.
3. Understand SuperStream Changes:
The deadline for super funds to allocate or return contributions will shrink from 20 business days to 3 business days, streamlining the process for all parties.
4. Train Your Team:
Make sure you and your payroll team understand the new requirements, including reporting changes under STP and the 7-day payment window.
5. Stay Informed:
More information and reminders around payday super legislation will most likely be released by the Australian Government leading up to July 2026. Keep an eye out to stay ahead of any changes. For more information, check out the Treasury Fact Sheet.
Need a hand navigating payday super? Get in touch with Amanda.