For businesses across Australia, staying on top of regulatory changes is just part of the game. One significant shift on the horizon is the move to payday superannuation. This isn’t just a minor tweak; it’s a fundamental change to how and when you’ll need to pay your employees’ super contributions.
what exactly is payday super, and more importantly, what do you, as a business owner or manager, need to know?
What’s the big deal about payday super?
Currently, many businesses pay superannuation contributions quarterly. The new legislation mandates a shift to a more frequent payment schedule, aligning super payments with your regular payday. This means that instead of a lump-sum payment every three months, you’ll need to pay super at the same time you pay your employees’ wages.
What this means for your business
The introduction of Payday Super will bring practical changes to the way you manage payroll and superannuation obligations and it’s important to understand the key areas where you’ll need to adapt and take proactive steps to ensure a smooth transition.
Here are some of the critical areas to consider:
- Under the updated Superannuation Guarantee (SG) framework, employers are required to pay SG contributions on the same day employees receive their Ordinary Time Earnings (OTE). These contributions must be received by the employee’s nominated superannuation fund within seven days of the corresponding payday.
- With each payment of Ordinary Time Earnings (OTE), a new seven-day due date will apply for Superannuation Guarantee (SG) contributions to be received by the employee’s superannuation fund. This timeframe accounts for the processing and transfer of funds through payment systems, including clearing houses. Employers will be liable for the updated SG charge if contributions are not received within seven calendar days of the associated payday.
- Qualifying Earnings Day (QE Day) = Pay day
- Pay day is defined as the date an employer makes a payment of qualifying earnings to an employee.
- Employers will be required to make SG contributions on a “QE Day”
- The due date to the super fund will be 7 calendar days after the QE Day. No additional time for weekends or public holidays.
- If superannuation contributions are not received by the employee’s super fund in 28 days after becoming payable, the ATO is required to give the employer a written notice to pay the outstanding amount. Under the upcoming Payday Super reforms, the SG charge will be updated to include penalties and interest on late payments. These measures are designed to fully compensate employees for any delays in receiving their superannuation contributions.
- Employers will be required to report both Ordinary Time Earnings (OTE) and superannuation liabilities through Single Touch Payroll (STP). This enhanced reporting will improve the ATO ability to monitor superannuation compliance in real time. The ATO will proactively identify late or missing contributions and take action to ensure unpaid super is addressed more promptly by employers.
- To comply with the upcoming Payday Super requirements, employers must ensure their payroll systems are configured to process Superannuation Guarantee (SG) contributions in alignment with employee wage payments. Small or irregular payments made outside of the standard pay cycle will not be recognised for SG purposes until the next scheduled payday.
- ATO Small Business Superannuation Clearing House is scheduled to close by 1 July 2026. Employers are encouraged to explore and transition to alternative superannuation payment solutions well in advance of this date to ensure continuity and compliance.
Early preparation is critical to avoid penalties and ensure a seamless transition to the new Payday Super requirements. By updating your payroll system well before 1 July 2026, your payroll team can eliminate last-minute complications and maintain full compliance with the new superannuation obligations.
Need Help Preparing for Payday Super?
At Empower Payroll, we’re here to make the transition to Payday Super simple and stress-free. Whether you need advice, or full payroll support, our team is ready to help.
Don’t leave it until the last minute — contact us today and get ahead of the changes!