Payday Superannuation is coming...

From 1 July 2026 Employers will be required to pay superannuation contributions for employees into their compliant, nominated superannuation funds at the same time as salary and wages payments are made.

There will be a new range of definitions, with Qualifying Earnings (QE) to replace Ordinary Time Earnings (OTE).

Superannuation contributions must be received into an employee’s nominated superannuation fund within seven (7) business days.  There will be allowable longer periods for receiving eligible superannuation contributions in certain circumstances, including for new employees - where payment for the first QE day must be received into the new employee's nominated superannuation fund within twenty (20) business days.

What do Employers need to do now to get ready for these changes?

• Review your payroll processes, and ensure you can make the necessary systems changes, so you can start paying superannuation contributions at the same time as you process salary and wages from 1 July 2026;

• Ensure your employee onboarding systems are efficient, and can meet the new timeframes;

• Train your payroll personnel on the new requirements, timeframes and definitions;

• Consider whether you need adjust your payroll period in readiness - although keep in mind that your Employment Agreements, or an applicable Modern Award or Enterprise Agreement will likely have limitations for pay periods, and notice periods to make a change and make sure your Employment Agreements are updated if needed to reflect these changes;

• Review your Contractor arrangements as well - don't forget you may have Contractors that need to be included, if you have an obligation to pay superannuation contributions for a Contractor direct to their nominated superannuation fund, given the extended definition of employee for the superannuation guarantee; and

• Be aware that the ATO's Small Business Super Clearing House is expected to cease operation from 1 July 2026 - so explore alternative options.

  
  

What happens if an Employer is not compliant?

If an Employer fails to pay superannuation contributions in full and on time, they will be liable for the superannuation guarantee change (SGC), unless superannuation contributions are received by their employee’s nominated superannuation fund within seven (7) business days of the relevant payday.  Penalties will apply under the new regime.

Employers should also be mindful that the ATO will have increased visibility on superannuation contributions, with enhanced data-matching capabilities, and a proactive approach to non-compliance, although the ATO will take a risk-based compliance approach in the first year.

Useful Resources

• ATO page: Payday superannuation | Australian Taxation Office

• The ATO has now released a Draft Practical Compliance Guideline: PCG 2025/D5 Payday Super - first year ATO compliance approach

• Visit the ATO Cash Flow Tips for small businesses, given moving to paying superannuation contributions at the same time as salary and wages is likely to negatively impact cash flow for many Employers

• Subscribe to Updates - ATO Business Updates: ATO - Subscribe - Subscribe and the Australian Payroll Association Newsletter Service and articles: Special Members Update - Payday Super

Please contact IR Legal Solutions if you require specific advice or assistance to prepare for and implement these changes.