‘Payday’ super coming 1 July 2026
The Government is introducing laws that will require employers to pay SG at the same, or similar time, as they pay employee salary and wages. The logic is that by increasing the frequency of SG contributions, employees will be around 1.5% better off by retirement, and there will be less opportunity for an SG liability to build up where the employer misses a deadline.
Originally announced in the 2023-24 Federal Budget, Treasury has released a consultation paper to start the process of making payday super a reality. The reforms are scheduled to take effect from 1 July 2026.
What is Payday Super?
From 1 July 2026, an employer will be required to make SG contributions on ‘payday’. Payday is the date that an employer makes an Ordinary Time Earnings (OTE) payment to an employee.
Each time OTE is paid, there will be a new 7 day ‘due date’ for contributions to arrive in the employees’ superannuation fund. This provides time for the movement of funds through the payment system, including clearing houses. An employer will be liable for the new SG charge unless SG contributions are received by their employees’ superannuation fund within 7 calendar days of payday.
There will be some limited exceptions:
- Contributions for OTE paid within the first two weeks of employment for a new employee will have their due date deferred until after the first two weeks of employment.
- Small and irregular payments that occur outside the employee’s ordinary pay cycle would not be considered a payday until the next regular OTE payment or ‘payday’ occurs.
What happens if it is paid late?
Super Guarantee Charge will apply when employers fail to pay contributions in full and on time. This is to ensure employees are not disadvantaged for any delay in receiving their super.
Retirement of ATO Small Business Super Clearing House
For those small businesses that uses ATO’s Small Business Super Clearing House to manage their super lodgements and payments, it is important to note that the Clearing House will be retiring from 1 July 2026. Employers are expected to ensure an alternative lodgement method is in place prior to the retirement to ensure a smooth transition and on time payments of super.
If you are lodging Super payments through your online accounting software, there should be no major changes as your software will take care of the changes.
Stay Ahead with Payday Super: Managing Accuracy & Cash Flow
With the shift to payday super, ensuring the accuracy of gross wage calculations is more crucial than ever. Any errors in wages can lead to incorrect super calculations, potentially causing late payments and compliance issues.
For businesses, this change means super liabilities must be paid alongside wages, adding pressure to cash flow. It’s essential to review your cash flow regularly to ensure sufficient funds are available for both wages and super obligations.
If you’re unsure where to start or need guidance, we’re here to help—reach out to us today!
