Payday super: What the proposed changes mean for employers

From 1 July 2026, employers will be legally required to pay Superannuation Guarantee (SG) contributions at the same time as salary and wages (‘payday’). This measure forms part of the Government’s Securing Australians’ Superannuation Package and is intended to mitigate the risks associated with non - payment and underpayment of superannuation.

Key administrative changes

Employers should prepare for the following updates:
• Superannuation funds will be required to allocate or return contributions within three business days, reduced from the current 20-day timeframe.
• The ATO’s Small Business Superannuation Clearing House will be decommissioned effective 1 July 2026.
• Revised choice of fund rules will simplify onboarding processes
and reduce the creation of duplicate accounts.
• Advertising restrictions will limit promotional activity to MySuper products that have passed the government’s performance test.

Employee entitlements and oversight

Employees are entitled to receive superannuation contributions in alignment with salary and wage
payments. These contributions will be visible through their superannuation accounts, allowing for greater
transparency. The Australian Taxation Office (ATO) and the Fair Work Ombudsman retain enforcement powers, and employees may lodge complaints directly with either body in cases of suspected non-compliance.

Superannuation Guarantee (SG) charge regime

Employers who fail to meet their obligations will be subject to the updated Superannuation Guarantee charge regime, administered by the ATO.

This includes:
• Repayment of the SG shortfall, calculated on Ordinary Time Earnings (OTE).
• Daily compounding interest (currently 11.36% per annum for the July– September 2024 quarter).
• An administrative uplift of up to 60% of the SG shortfall, with reductions available for voluntary disclosure.
• Additional penalties of up to 50% if assessed liabilities are not paid within 28 days.

To comply with the payday super requirements, employers must ensure Superannuation Guarantee contributions are made immediately following each Ordinary Time Earnings (OTE) payment and received by the employee’s nominated fund within seven calendar days. Payroll systems and governance processes should be reviewed and updated accordingly. Transitional exceptions will apply for contributions related to the first two weeks of new employment and for small or irregular payments outside standard pay cycles.