From 1 July 2026, employers must pay superannuation guarantee (SG) contributions at the same time as employee wages. The reforms aim to address the gap in unpaid superannuation and improve retirement outcomes for employees, with the Australian Taxation Office describing Payday Super as a “once in a generation change” and urging early preparation.
Unlike the implementation of Single Touch Payroll (STP) Phase 1 and 2, there is no legislative deferral available. Therefore, employers are required to be compliant with Payday Super requirements from 1 July 2026.
Key requirements from 1 July 2026 include:
| Topic | Requirements from 1 July 2026 | Comments / Insights |
|---|---|---|
| SG payments | SG contributions must be paid on payday and received by the super fund within 7 business days. | |
| SG contribution due date | Due within 7 business days of “payday”. Exceptions may apply for certain circumstances, including, new employees and a change of employee super fund. | |
| Calculating SG contribution | SG is calculated at 12% of an employee’s “qualified earnings” (QE). QE include: – Ordinary time earnings (OTE), – All commissions, – Salary sacrifice amounts, and – Earnings paid to workers / contractors who are considered employees for SG purposes. | The terminology “qualifying earnings” is distinct from OTE. While QE will likely be the same as OTE for many employers it is important that employers ensure payroll systems / wage code mapping are set up to address this change. |
| Superannuation guarantee charge (SGC) | Under Payday Super, the SGC will comprise: – Individual final SG shortfalls, – Notional earnings, – An administrative uplift (initially 60% but may be subject to reduction), and any choice loadings. | Note that there is a distinction between “base SG shortfall” and “final SG shortfall”. A final SG shortfall is calculated as: Base SG shortfall less further super paid to the employee’s fund before the SG assessment is made. |
| Penalties | Penalties can vary from 25% or 50% of the unpaid superannuation guarantee charge (SGC), depending on prior penalties. | |
| STP | Employers must report QE and super liabilities via STP. | |
| SGC Statement | SGC Statements will no longer be required for late or missed payments, although voluntary disclosures may be made before an ATO SG assessment. |
The ATO has issued Practical Compliance Guideline (PCG 2026/1) outlining the compliance approach for the operation of the first financial year of the Payday super regime.
PCG 2026/1 outlines a risk‑based compliance approach for the first year of Payday Super, determining when the ATO will allocate compliance resources. The PCG is not binding on the ATO, therefore, employers in the low-risk zone may still be contacted by the ATO.
Clearing House
The Small Business Superannuation Clearing House (SBSCH) will no longer be available to existing users after 30 June 2026. Employers who are currently using the SBSCH will need to switch to an alternative platform to pay SG.
Employers should review whether their payroll software supports super payments, particularly given the closure of the SBSCH to existing users from 30 June 2026.
Maximum contributions base (MCB)
The MCB is the upper limit of your employee’s earnings for each financial year for which you need to pay SG. If payments of qualifying earnings reach the MCB, employers can stop paying the minimum SG contributions for the employee for that year.
From 1 July 2026, the calculation of the MCB will be on an annual limit, rather than a quarterly limit. This change may affect payment arrangements for employees expected to exceed the MCB.
Cash flow pressures
It is important to consider cash-flow pressures for businesses that have historically paid SG on a quarterly basis. As SG will now be required to be paid in line with “payday”, it is important that businesses manage cash-flow arrangements to ensure SG contributions are paid within the 7-day period, to avoid interest and penalties being levied.
Salary sacrifice
With the changeover on 1 July 2026, it is recommended that employers monitor the facilitation of superannuation payments for the preceding pay cycles, particularly for employees with salary sacrificing arrangements, to ensure employees do not exceed concessional contribution caps.
Contractors and expatriates
Payments to contractors who are entitled to SG will be required to be paid in line with each payment made to them. It is recommended employers ensure contractors are onboarded correctly to ensure tax and superannuation obligations are met.
There are still some unknown gaps for how the Payday super regime will apply to expatriate employees on shadow payroll, where employers have no STP2 reporting obligations or a delayed STP2 reporting obligation. More information is expected to be provided to manage these requirements.
With Payday Super introducing a fundamental change to how and when superannuation must be paid, employers face increased compliance risks and significant operational uplift. Ensuring payroll accuracy, managing contractor obligations, transitioning from the SBSCH, and updating systems for QE, salary sacrifice and MCB changes can be complex.
Exant Advisory can assist by conducting payroll system reviews, managing ongoing SG processing, monitoring compliance, and providing end‑to‑end support to ensure your organisation meets its obligations efficiently. If you would like tailored assistance or wish to explore outsourcing options for Payday Super, please contact your usual Exant Adviser or alternatively our specialist Donavin Van Rooyen via the form below or on 07 3218 3900.
Author: Preethi Pasumarty