Payday Super
From key dates to the latest changes on Payday Superannuation contributions
What is Payday Super
Payday Super is new legislation that requires employers to pay their employeesโ super guarantee on โpaydayโ โ the same time as salary and wages. Super contributions must be received by an employeeโs super fund within 7 business days of qualified earnings (QE). The law comes into effect 1 July 2026.
The current quarterly super payment policy will no longer comply with the new changes, and new fines will be assessed for missed, late, or underpaid superannuation contributions.
What Payday Super means for employers
Employers will need to adjust their payroll processes to allow for more frequent payments of super contributions to their employees’ super funds by the seven-business-day deadline. While this doesn’t increase the amount of super paid to employees, the higher payment frequency means employers need to factor their business’s cash flow.
From 1 July 2026, businesses will be required to pay their employees’ superannuation guarantee (SG) within 7 business days of their regular wages. Qualifying earnings (QE) is a new term for the types of payments employers make to employees that are used to calculate the super guarantee (SG) under Payday Super.
From 1 July 2026, all employers will use qualifying earnings as the basis for calculating both the SG amount and the super liability in STP.
If an employer fails to pay, they are liable for the SG charge โ even before the Australian Taxation Office makes an assessment. This means businesses must prepare for compliance changes in their payroll systems.
Changes to Superannuation contributions
Payday Super comes into effect in July 2026, so businesses need to check their payroll systems to make sure they’re ready to comply with the changes.
Key changes to the superannuation guarantee charge:
- The outstanding SG shortfall will be calculated based on an employee’s notional earnings.
- The shortfall will incur daily interest on a compounding basis.
- An administrative charge of 60% of the SG shortfall will apply.
- Additional charges will be levied after an ATO assessment if the full amount of the SG charge has not been paid within 28 days.
Preparing for Payday Super
Business owners must be prepared to remain compliant under the proposed Payday Super changes. Payroll and SuperStream software can help ensure businesses are on the right track to facilitate these changes.
In the federal government announcement, they have outlined how businesses will be supported during the transition:
- The ATO’s Small Business Superannuation Clearing House will be retired from 1 July 2026. Businesses using this service will need to find an alternative platform. The ATO will contact small businesses ahead of time to provide support.
- The superannuation funds deadline to allocate contributions will be reduced from 20 business days to 3.
- The New Payments Platform will be implemented to better handle SuperStream data and payments, allowing businesses to address errors faster and more efficiently.
- Choice of fund rules will be revised to better assist employees in nominating their superannuation fund when starting new employment.
- Advertisements will be limited to performance-tested MySuper products during onboarding.
Payday Super: why is it happening?
The Australian Government has introduced the Payday Super legislation to combat wage theft in unpaid superannuation contributions. The effects of wage theft on Australian workers:
- Approximately $5.7 billion of super goes unpaid each year.
- On average, $110 million per week goes unpaid to retirement savings.
- 3.3 million Australians lost an average of $1,730.00 between 2022 and 2023.
- Just $1,730.00 of unpaid super leaves workers up to $30,000.00 poorer in retirement.
To enforce the proposed Payday Super changes, the ATO has imposed stricter penalties on businesses that fail to comply, creating a fairer superannuation system.
Reckon Payday Super Explainer Video
Check out our short video explaining Payday Super!
Get Payday Super Compliant with Reckon Software
By using Reckon payroll software, you can make sure you’re compliant with the proposed Payday Super changes.
Worried about the ATO’s small business clearing house shutting down? No sweat, our free clearing house solution that comes with our payroll subscriptions has got you covered.
Submit your pay runs with confidence using Reckon Payroll!
Key Takeaways
Payday Super will come into effect 1 July 2026
Businesses must pay super contributions to their employees at the same time as regular salary and wages.
Missed, late, or underpaid super contributions that fall outside the 7-day due date will incur the superannuation guarantee charge penalty.
The ATOโs Small Business Superannuation Clearing House will be retired on 1 July 2026, and businesses that use this service must find an alternative super clearing house provider.
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Everything you need to get ready for Payday Super
Our guide details everything you need to know, from key dates, qualified earnings, and how to stay compliant. Don’t get caught out, and download your guide today!
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Frequently asked questions
When will Payday Super come into effect?
Why is Payday Super happening?
The federal government has announced payday super legislation to address ongoing issues with missed, late, and underpaid super contributions and ensure that Australians have secure retirement savings.
What are qualifying earnings?
Qualified earnings (QE) are the amounts earned by employees for which the superannuation guarantee is calculated. QE is a new term that combines ordinary time earnings (OTE) and other payments.
QE is comprised of several components:
- Base salary and wages: Payments for ordinary hours of work.
- Lump sum payments: Payments in arrears and return-to-work payments.
- Commissions and bonuses: All commission payments and bonuses, except for bonuses earned from work performed outside ordinary hours.
- Paid Leave: This includes most leave types, such as annual, personal, and long-service leave.
- Allowances: Most allowances that cover skilled work, on-call, adverse conditions and retention. Does not include expense allowances.
What qualified earnings donโt include are:
- Overtime payments: Payments for earnings made outside of ordinary hours.
- Termination payments: Payments received, such as redundancy and unused annual leave.
- Expense Allowances: Where money is expected to be paid by the employee (meal allowances).
For more information, check out the ATO’s qualifying earnings factsheet.
What happens if I make a late contribution?
What happens if I make a mistake in one of my employee's super payments?
Payday Super doesn’t just affect how employers pay employee super contributions; it also requires superannuation funds to process super guarantee payments faster.
Super funds have 3 business days to verify the payment and SuperStream data, and to allocate the payment to the employee’s fund or return it to the employer for correction.
Are there exceptions to the Payday super 7-business-day deadline?
There are some exceptions to the 7-day deadline:
- First contribution to a new employee or super fund: allows for 20 business days after the relevant QE day.
- Out-of-cycle payment: Due 7 days after the next QE event.
- Exceptional circumstances: Gives 20 business days after the current QE event or the date ATO gives a determination.
- Extension of one due date overlaps the next dude date: If the extension overlaps the second date, the second QE day is the same as the extended due date for the first QE day.
For more information checkout the payment deadline page on the ATO website.
What is the Superannuation Guarantee?
What is the Superannuation guarantee charge?
Who will enforce the new changes?
What is a superannuation clearing house?
A super clearing house is a facility that pays your employees super contributions to their respective superannuation funds.
All you have to do is send an electronic payment to the clearing house with your employees super contribution details and the clearing house handles the rest.
How does Reckon Payroll help me with Payday Super compliance?
Reckon Payroll can keep you compliant with our free super clearing house solution powered by Beam. Using Reckon and beam allows you to send your employee super contributions without the extra fees.
Beam is issued by Precision Administration Services Pty Ltd (Precision) (ABN 47 098 977 667, AFSL 246 604). Precision is wholly owned by Australian Retirement Trust Pty Ltd (ABN 88 010 720 840, AFSL 228 975), trustee of Australian Retirement Trust (ABN 60 905 115 063).ย Read the Beam PDS for Reckon before making a decision.
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