What Payday super will mean for you and your business
If you’re in business and employ people, you’ve likely heard the news already. New requirements will mean that employee superannuation will become payable on payday from 1st July 2026. What does this mean for your business?
Compulsory employee superannuation contributions, known as ‘super guarantee’ amounts, will need to be paid to an employee’s superannuation fund at the same time as a pay run is made. For example, if you pay fortnightly, you will need to submit superannuation contributions fortnightly as well. This is in contrast to the current system where compulsory employer contributions are accrued and paid to an employee’s super fund quarterly.
What’s changing?
Timing – From 1st July 2026, superannuation guarantee payments must be received by the employee’s super fund within 7 business days of the corresponding pay run. This is extended to 20 days for new employees or where a new fund is provided by an existing employee.
Previously an employer had 28 days after the end of a financial quarter (i.e. end of month March, June, September and December) for the payments to hit the fund.
Penalties – The short timeline highlights still further one of the flaws in the super guarantee system in that penalties are incurred based on when the contribution reaches the fund, even though the employer loses any control over how much longer it takes to process the contribution.
Under the current system, penalties for late or non-payment can be up to 200% of the outstanding amount. From 1st July however, this reduces to 25% or 50% depending on any past penalties.
In addition, a new payments platform will be introduced to allow near real-time payments and improved error messaging. This will help deal with delays caused, for example, by employees getting a number wrong when providing their account details. Super funds will also need to provide member verification when receiving employer contributions for the first time.
Small Business Superannuation Clearing House – One way that many small businesses managed the compliance headaches of paying employee super was to use the Government’s own Small Business Superannuation Clearing House (SBSCH).
Unfortunately SBSCH will be unavailable from 1st July 2026. It had already stopped taking new users in October 2025, but when payday super begins, all users will need to find an alternative solution. For most this will involve using a software application that can manage payday super.
What do you need to do?
Businesses that employ people should start preparing now. There will be cash flow implications on top of the various new compliance obligations, because amounts that had been due each quarter will now be payable following each pay cycle. On the other hand, like a payment plan, the instalments will be much smaller and therefore potentially less seismic than three months’ worth of super paid in one lump sum. It will require some planning.
Employee superannuation details – Make sure you have up to date superannuation details for all employees. When taking on new employees, try to get their super fund details as soon as practical. A good policy is to make it part of the first day on-boarding process. Ask new staff to bring those details on their first day, even if a pay run may not be due for a couple of weeks.
Ensure your software allows for the processing of payday super – Because the Small Business Clearing House is shutting down from 1st July 2026, you won’t be able to use it for superannuation payments. You will have to have a software solution that can process payday super for you. You should start speaking to your software provider about that now.
Many popular applications have already made the necessary updates to process payday super. Technically, if you use one of these solutions, there’s nothing stopping you moving to paying super with every pay cycle now.
More information, including a downloadable fact sheet, is available from the ATO website.
If you have any questions or would like further advice, we’re here to help. We can also assist in the selection and setup of a software solution for you.
