Payday Super is Now Law: What Employers Need to Know for 1 July 2026
The Australian Government has passed legislation requiring employers to pay superannuation at the same time as salary and wages starting 1 July 2026. This reform aims to improve retirement outcomes and ensure timely payments.
What is Changing?
From 1 July 2026, the current quarterly payment system will be replaced by Payday Super. Employers will be required to remit Superannuation Guarantee (SG) contributions every time they pay their employees. This shift is designed to ensure that super is treated with the same priority as wages, helping to close the "unpaid super gap."
Key Requirements for Employers
The 7-Day Rule: Contributions must be received by the employee’s super fund within 7 business days of payday.
Qualifying Earnings (QE): SG will be calculated based on QE, a new term that includes ordinary time earnings, salary sacrifice amounts, and other specific payments.
Fund Obligations: Super funds will have a reduced timeframe (3 business days) to allocate or return contributions.
Small Business Clearing House: The ATO Small Business Superannuation Clearing House (SBSCH) will close on 30 June 2026. Affected businesses must transition to a SuperStream-compliant alternative.
Preparing Your Business
To ensure a smooth transition, the Australian Taxation Office (ATO) recommends reviewing your payroll governance and cash flow now. Frequent payments may require adjustments to how your business manages its liquid assets. You should also confirm with your software provider that your systems will support Single Touch Payroll (STP) reporting for both QE and super liabilities.
Why the Change Matters
By moving to a payday-based system, employees benefit from faster compounding interest on their contributions. For employers, the move provides greater transparency and reduces the risk of large, unexpected quarterly liabilities or penalties associated with the Super Guarantee Charge (SGC).
Frequently Asked Questions (FAQ)
1. Does Payday Super apply to all businesses?
Yes. All employers, regardless of size, must comply with the new rules for any salary or wages paid on or after 1 July 2026.
2. What happens if I pay late?
If contributions are not received by the fund within 7 business days, you may be liable for the SGC, which includes interest and administrative penalties.
3. Is there an exception for new employees?
Yes. For a new employee's first contribution, employers generally have an extended window of 20 business days from payday to ensure the fund receives the payment.
4. Can I still use the SBSCH?
The SBSCH will no longer be available for payments made on or after 1 July 2026. You will need to transition to a commercial clearing house or payroll-integrated solution.
5. How do I calculate "Qualifying Earnings"?
QE is the new base for super calculations. It largely mirrors ordinary time earnings but includes salary sacrifice contributions and other specific earnings as defined by the ATO.
Connect with our Linkins team today for expert support in navigating the Payday Super transition and ensuring your payroll systems are compliant.
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Disclaimer:
The information and content provided in this publication are purely for informative purposes. It is not meant to serve as advice, and decisions should not be made solely based on this information.
Reference: ATO Payday Super Resources
