What is Payday Super?
Payday Super means instead of superannuation guarantee (SG) contributions being paid quarterly, they must be paid at the same time as wages. Every time you run payroll, the related super must also be paid so it reaches the employee’s super fund within seven calendar days of payday.
In practical terms:
- Super must be calculated and paid each time wages are paid (weekly, fortnightly, or monthly).
- Super contributions must be received by the employee’s nominated super fund within seven business days of payday.
- For new employees, the first super contribution must be received by the employee’s super fund within 20 business days of their first wage payment.
- Late or missed super payments will continue to attract penalties and may also create Fair Work compliance risks.
The Australian Taxation Office administers and enforces the superannuation guarantee system, including Payday Super.
How Super will be calculated from 1 July 2026
Super will still be calculated at 12%. However, now “qualifying earnings” is a new term which standardises the earnings base. For many employers, this will not change the total amount of super paid, but it does change how it is defined and reported.
In broad terms, qualifying earnings include:
- Ordinary time earnings (as currently defined).
- All commissions, including commissions earned outside ordinary hours.
- Certain allowances, bonuses and certain lump sum payments that are treated as earnings for super purposes.
- Salary sacrifice amounts that would have been qualifying earnings if paid as wages.
Payments to contractors who are paid mainly for their labour and treated as employees for superannuation purposes.
Closure of the Small Business Superannuation Clearing House
The Small Business Superannuation Clearing House (SBSCH) will close permanently from 1 July 2026. Employers using SBSCH must transition to an alternative clearing house or payroll-based super payment solution before that date.
What is the Date of these Change?
From 1 July 2026, employers must participate in Payday Super, the new qualifying earnings rules apply and the SBSCH will close.
How Should You Implement the Changes
Payday Super shifts super from a periodic compliance task to an ongoing payroll task.
Employers will need to treat super in a similar way to PAYG withholding, calculated and paid every pay cycle, so it is received by the employee’s super fund within required timeframes.
For employers who already pay super each pay run, the operational impact may be limited. For those currently paying quarterly, the changes will affect payroll timing, cash flow planning, system capability, and internal controls.
From 1 July 2026, employers must ensure that:
- Super is calculated at 12% of qualifying earnings for each pay run.
- Super and qualifying earnings are accurately reported through Single Touch Payroll (STP) each pay cycle.
- Super payments are processed promptly so they are received by the employee’s super fund within seven business days of payday (unless an extended timeframe applies).
- Payroll and super payment systems are capable of handling more frequent payments and stronger validation requirements.
- If currently using the Small Business Superannuation Clearing House (SBSCH), an alternative clearing house or payroll-based super payment solution is in place before the SBSCH closes on 1 July 2026.
Super payment delays caused by processing errors, rejected contributions, or outdated super fund details can result in penalties under the super guarantee charges. Reviewing payroll configurations, employee classifications, super fund data, and approval processes well in advance will reduce compliance risk.
Risks
Cash flow impact for smaller employers
Quarterly super payments may have been used to give some businesses short-term cash flow flexibility. From July 1, 2026, super will need to be funded at every pay run, which may require changes to working capital management and cash flow forecasting.
Increased importance of payroll accuracy
Payroll errors may become more costly and harder to unwind, now that the superannuation is paid at that time. Incorrect classifications, mistakes on overtime or penalty rate and any retroactive pay changes will require additional super corrections. Ensuring you have a fully compliant payroll and tight time and attendance processes, as well as resolving issues before payroll is finalised, will reduce the risk of having to correct superannuation payment mistakes. It’s important to remember that corrections after payroll may require super adjustments, amended reports, and follow-up with clearing houses or funds.
Payroll and systems capability
Payroll systems must be able to calculate super correctly each pay run and process payments promptly. Manual or semi-manual processes increase the risk of late payments and errors once super payments are required every cycle.
More Information
Further detail on Payday Super, including employer obligations, timing rules, and examples, is available from the Australian Taxation Office by Clicking Here.
Information on how superannuation obligations interact with workplace laws, awards, and employment standards is available from the Fair Work Ombudsman by Clicking Here.
Need Advice?
ER Strategies are experts in employment compliance and can assist you in managing your employment compliance responsibilities. To discuss your obligations and assistance we can provide, get in touch with us at 1300 55 66 37, or click the button below.
