Payday Super: What does the new legislation mean for employers?

The Federal Government has introduced major changes to superannuation guarantee rules. The Payday Super legislation, which received Royal Assent on 6 November 2025, will take effect from 1 July 2026.

Key changes

• From 1 July 2026, employers must ensure superannuation contributions are paid into their employee’s nominated fund within seven business days of payday
• Payday refers to the date an employer issues qualifying earnings (QE) to an employee
• QE is a new concept that includes:
  • Ordinary time earnings (OTE)
  • Salary sacrifice contributions
  • Other amounts which are included in an employee’s salary or wage
• The legislation contains an extended timeframe to pay contributions in certain circumstances
  • When an employer is contributing to a superannuation fund for the first time
  • Payments are made to an employee outside the regular pay cycle
  • Where exceptional circumstances have impacted the ability of multiple employers on a large scale to pay superannuation contributions
• If an employer fails to pay contributions in full and on time, they are liable for superannuation guarantee charge (SGC)
  • Individual final superannuation guarantee (SG) shortfall: refers to any contribution that remains unpaid when the SGC is assessed. This shortfall is calculated based on QE creating consistency with the calculation of SG contributions. Any late contributions made before the SGC assessment will reduce this shortfall
  • Notional earnings: an interest component added to compensate employees for lost investment returns when their superannuation contributions are not received in full and on time
  • Administrative uplift: applied to cover enforcement costs and encourage employers to make voluntary disclosures to the ATO
  • Choice loading: applied when an employer fails to comply with the employee’s choice of fund rules
• Once the SGC is assessed, additional interest and penalties may apply if the liability is not paid in full
  • General interest charge (GIC): Interest will accrue on the entire SGC amount, not just the individual shortfall amounts
  • Late payment penalty: If the SGC remains unpaid 28 days after assessment, the ATO will issue a notice to pay. Failure to pay within the further 28-day period specified in the notice will result in a late payment penalty
• The SGC will be tax-deductible, ensuring consistency with the income tax treatment of superannuation contributions
• The late payment offset will no longer apply to contributions made after 1 July 2026, however a similar mechanism will apply to reduce the final SG shortfall by late contributions paid by an employer, as outlined above
• The Small Business Superannuation Clearing House (SBSCH) closed to new users from 1 October 2025 and will be fully retired on 1 July 2026
• Super funds must now allocate or return unallocated contributions within three business days (down from twenty). SuperStream standards will be updated to enable faster payments via the new payments platform and improve error messaging, helping employers and intermediaries resolve issues quickly
• Employers must report both QE and the employee’s superannuation liability through Single Touch Payroll (STP) to ensure accurate SG calculations

What should employers do to prepare?

Employers should begin to prepare for the introduction of payday super. There are several steps to consider: 
1. Audit your payroll system 

Ensure your system supports real-time SG payments and STP compliance. If you use the SBSCH, you will need to transition to an alternative solution.

2. Payroll training 

Make sure that your payroll team understands the new obligations and implications. 
Also, QE is a new concept and forms the basis for calculating and paying superannuation contributions. Understanding QE will ensure that your business pays the correct contribution, remains compliant, and avoids penalties. 

3. Plan future cashflow

SG will need to be paid immediately after payday instead of quarterly. Cashflow strain may occur. Proper planning and preparation can help manage this and ensure that sufficient cashflow is available to meet compliance requirements associated with SG payments.

4. Review onboarding process 

Ensure that appropriate information is captured during employee onboarding. Contributions will need to be received and accepted by the fund within tight timeframes, data errors may impact compliance. 

If you have questions about how this impacts you and your superannuation obligations, please get in touch.