From 1 July 2026, the way employers pay superannuation will fundamentally change. Under the new Payday Super rules, compulsory super contributions will need to be paid around the same time as employees are paid their wages and salaries, rather than quarterly.
This reform is designed to improve retirement outcomes for employees, reduce unpaid superannuation and ensure superannuation is treated as a core part of wages.
For many businesses, this change will require adjustments to payroll processes, cash flow management, and compliance systems. Below is a summary of what is changing, what stays the same and how employers can start preparing now.
The Two Key Changes Employers Should Know
1. Superannuation must be paid with wages
Currently, employers can pay superannuation quarterly. From 1 July 2026, superannuation must generally be paid so that it reaches an employee’s superannuation fund within days of each pay run. This means superannuation will move from being a periodic compliance task to an ongoing payroll obligation, aligned closely with how and when staff are paid.
2. Stronger consequences for non-compliance
The reforms also strengthen the consequences of late or missed superannuation payments. While the Superannuation Guarantee Charge will become tax deductible under the new rules, penalties and interest may be higher, particularly for businesses with poor compliance histories.
Current Superannuation Obligations (Until 30 June 2026)
Under the current system:
- Employers must pay 12% superannuation on an employee’s ordinary time earnings (OTE).
- Superannuation is paid quarterly, with deadlines being the 28th day after the end of each quarter (March, June, September and December).
- If superannuation is not paid on time, employers must lodge a Superannuation Guarantee Charge statement with the ATO.
What Changes Under Payday Super From 1 July 2026
Superannuation will need to be with each pay cycle and will be based on an employee’s qualifying earnings (QE). This new term includes:
- Ordinary time earnings
- Other earnings subject to superannuation
- Salary sacrificed superannuation contributions
- Payments to individuals deemed employees for superannuation purposes (including certain contractors)
The day wages are paid is known as the QE day.
Superannuation must reach the employee’s superannuation fund and be allocated to their account as follows:
- Standard pay runs: Within 7 business days of the QE day
- Extended usual payments (e.g. new employees or fund changes): Within 20 business days of the QE day
- Exceptional circumstances (e.g. natural disasters): Within the later of 20 business days after the QE day or 20 business days after an ATO determination
- Out-of-cycle payments (bonuses, commissions, back pay): Within 7 business days after the next QE day, or 7 business days from the QE day if there is no next pay run
A business day excludes weekends and any public holiday in any Australian state or territory.
New Superannuation Guarantee Charge (SGC) Rules
If superannuation is paid late under Payday Super:
- Interest will be charged at the ATO’s general interest charge rate
- The administration fee will include an uplift based on compliance history and whether the employer voluntarily discloses
- The uplift can be up to 60% of the final SGC liability
Instead of lodging an SGC statement, employers will make a voluntary disclosure in an ATO-approved form, after which the ATO will calculate the SGC liability.
While the SGC amount will be higher, the SGC will become tax deductible.
Changes to the Maximum Contributions Base
The maximum contributions base (MCB) is the maximum amount of earnings on which superannuation must be paid.
Currently, this is calculated quarterly. From 1 July 2026, it will move to an annual cap, calculated as:
Concessional contribution cap ÷ Superannuation guarantee rate
Once an employee reaches this limit, no further compulsory superannuation is required for that year. This change helps ensure employees do not exceed their concessional contributions cap.
Transition From the Small Business Superannuation Clearing House
- Employers who currently use the Small Business Superannuation Clearing House (SBSCH) will need to transition to paying superannuation directly to employee funds, as the SBSCH will close under Payday Super from 1 July 2026.
What Employers Should Do Now
Although Payday Super does not commence until 1 July 2026, early preparation will help avoid compliance stress later. We recommend employers:
- Review payroll systems and software capabilities
- Understand how quickly superannuation can be processed and allocated to employees’ funds
- Assess cash flow impacts of paying superannuation alongside wages
- Update internal processes and controls
- Consider implementation and planning requirements
Next Steps
Payday Super represents a meaningful shift in how superannuation is treated, reinforcing that superannuation is part of an employee’s pay and not a quarterly obligation to manage later. Please contact us if you would like to discuss what this means for your organisation.
