Payday Superannuation: What Employers Need to Know from 1 July 2026
From 1 July 2026, employers must pay employee superannuation on payday under the new Payday Superannuation reform. The change aims to ensure faster contributions, improve employee retirement savings, and reduce unpaid super. Employers will need updated payroll systems, faster reporting through Single Touch Payroll, and compliance with new ATO timelines. Trinity Accounting Practice helps businesses prepare for these updates and avoid Superannuation Guarantee penalties.
Payday Superannuation: What Employers Need to Know from 1 July 2026
Last updated: 9 October 2025
The Australian Government has announced major changes to superannuation guarantee (SG) payments. From 1 July 2026, employers must pay superannuation at the same time as employee wages. This reform, called Payday Superannuation, aims to improve employee retirement outcomes and ensure timely contributions.
Overview of the Payday Superannuation Bills
On 9 October 2025, the Government introduced two key pieces of legislation:
- Treasury Laws Amendment (Payday Superannuation) Bill 2025
- Superannuation Guarantee Charge Amendment Bill 2025
These changes are not yet law but are expected to take effect from 1 July 2026.
Key Changes for Employers
1. Payment Timing
Employers must pay superannuation on the same day as wages. Contributions must reach employees’ funds within 7 business days after payday. Employers who fail to meet this deadline will face the Superannuation Guarantee Charge (SGC).
2. Definition of Qualifying Earnings (QE)
A new concept, QE, will define payments triggering super obligations. It includes:
- Ordinary time earnings (OTE)
- Salary sacrifice super contributions
- Other current salary or wage components used for SG
Extended payment timeframes will apply in limited cases, such as new employees, irregular pay cycles, or large-scale system disruptions.
3. Updated Superannuation Guarantee Charge (SGC)
Employers who miss or underpay contributions will be liable for SGC, which will now include:
- Individual final SG shortfall: Any unpaid contributions based on QE
- Notional earnings: Interest compensating employees for lost fund earnings
- Administrative uplift: Additional charge to recover ATO enforcement costs
- Choice loading: Penalty for not following choice of fund rules
Once assessed, further interest and penalties can apply until full payment is made.
Additional Employer Liabilities
- General Interest Charge (GIC): Will accrue on the full SGC amount.
- Late Payment Penalty: If unpaid after 28 days of assessment, the ATO will issue a notice to pay. Failure to pay within another 28 days triggers further penalties.
- Tax Deductibility: The SGC remains tax-deductible.
- Late Payment Offset: Will no longer apply to contributions made after 1 July 2026.
Small Business Superannuation Clearing House (SBSCH) Closure
The SBSCH will be decommissioned from 1 July 2026 and closed to new users from 1 October 2025. Small businesses will need to switch to commercial payroll software capable of real-time super payments. The ATO plans to support small employers through this transition.
Fund Allocation and SuperStream Updates
- Funds will have only 3 business days to allocate or return unallocated contributions (previously 20 days).
- SuperStream standards will be updated to enable faster payments through the New Payments Platform (NPP) and improve error resolution.
Single Touch Payroll (STP) Updates
Employers will be required to report both qualifying earnings and super liabilities in STP. This will help the ATO identify and enforce timely superannuation payments.
ATO Compliance Approach
The ATO has issued Draft Practical Compliance Guideline 2025/D5 outlining its compliance strategy for the 2026–27 year. The focus will be on education and transition support in the first year of implementation.
Preparing Your Business
To stay compliant, employers should:
- Review payroll systems for same-day super payment capability.
- Update software to support STP changes.
- Engage with payroll providers before July 2026.
- Train finance and HR teams on new obligations.
- Plan for cash flow impacts of more frequent super payments.
Trinity Accounting Practice helps employers manage payroll compliance and prepare for the upcoming Payday Super reforms. We can review your systems, ensure STP accuracy, and help you avoid SGC penalties.
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More Details https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/payday-superannuation
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