Payday Super
What do you need to know before 1 July 2026?
Significant changes are coming to Australia’s superannuation system, and employers need to be ready. From 1 July 2026, the introduction of Payday Super will fundamentally change how businesses pay superannuation guarantee (SG) contributions.
While the reform is designed to improve retirement outcomes for employees and reduce unpaid super, it will also bring tighter deadlines, increased ATO visibility, and cash flow considerations for employers – particularly small and medium businesses.
Understanding what’s changing now will help ensure a smooth transition and avoid costly penalties down the track.
How Payday Super Works
Under Payday Super, employers will be required to pay superannuation at the same time as salary and wages are paid.
From 1 July 2026 Key Changes include:
- Super guarantee must be paid on payday
- Contributions must be received by the employee’s super fund within 7 business days.
This replaces the current quarterly payment model, where employers have up to 28 days after the end of each quarter to make super payments.
Importantly, businesses do not need to wait until 1 July 2026 – employers can choose to start paying super on payday earlier if they wish (in fact, we have already transitioned many of our clients to Payday Super).
Late payments and the super guarantee charge
The consequences of missing a deadline will also change significantly.
From 1 July 2026, if super is not received by the fund within 7 business days:
- The SGC will be assessed by the ATO (not self-assessed);
- The SGC will be calculated based on Qualifying Earnings (ordinary times earnings plus salary sacrifice contributions plus any payments included in salary and wages for super purposes);
- Interest will compound daily at the General Interest Charge rate;
- An administrative uplift of 60% of the shortfall will apply (which may be reduced if the employer makes a voluntary disclosure);
- Unlike the current system, the SGC will be tax deductible (but the administrative uplift and penalties will not be deductible).
Penalties Will Still Apply
Penalty rules will also change:
- Penalties will be 25% or 50% of the unpaid SGC instead of the old maximum of 200% which could be remitted in part or full.
- The rate will depend on the employer’s compliance history.
This reinforces the importance of accurate payroll processing and timely payments.
Small Business Superannuation Clearing House (SBSCH)
Small business employers should take note of this change.
- The SBSCH closed to new users on 1 October 2025
- Existing users can continue until 30 June 2026
- From 1 July 2026, the SBSCH will no longer be available
All businesses currently using the SBSCH must transition to an alternative super payment solution before Payday Super begins.
What Should Employers be Doing Now?
Even though Payday Super starts on 1 July 2026, preparation should begin well before then.
✔️ Review payroll systems
Ensure your software will be updated to handle qualifying earnings calculations, STP reporting, and same-day super processing.
✔️ Plan for cash flow changes
Paying super more frequently doesn’t increase the total cost — but it does change when money leaves your business.
✔️ Transition away from the SBSCH
If you’re currently using the Clearing House, now is the time to move to an alternative solution.
✔️ Check employee data
Accurate super fund details will be essential to avoid rejected or delayed payments.
✔️ Seek professional advice
We can help you model cash flow impacts and ensure compliance well ahead of the deadline.
DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent,
Jeanette has over 20 years experience as an accountant in public practice. She is a Chartered Accountant, registered tax agent and accredited SMSF Association advisor. When she is not helping business owners grow their empires, you will likely find her out running on the trails or at the gym. Book in to see Jeanette today.
