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- Feb 24
- 5 min read
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Super on Payday: Fundamental Changes for Employers
If you run a business, you already know the juggling act that comes with managing the payroll process — paying staff on time, managing cash flow, and staying compliant. From 1 July 2026, there’s a major change coming that will reshape how you handle superannuation contributions for staff.
It’s called Payday Super, and it became law on 4 November 2025.
What’s Changing?
From 1 July 2026, you’ll need to pay superannuation guarantee (SG) contributions at the same time as wages, rather than weeks or months later. Employers will have seven business days from payday to ensure contributions hit employees’ super funds.
If payments are late, the Superannuation Guarantee Charge (SGC) will apply — that means paying the missed super plus an interest and administration penalty. Once SGC has been assessed, additional interest and penalties may apply if the SGC liability isn’t paid in full.
Unlike the existing system, SGC amounts will normally be deductible to employers, although penalties for late payment of SGC won’t be deductible.
On top of this, the ATO will retire the Small Business Superannuation Clearing House (SBSCH) platform from 1 July 2026 for all users and alternative options should be sought.
What's the impact on your Business?
This reform might sound like extra admin, and it might take a bit of getting used to, but it can actually simplify your payroll process and strengthen your reputation as an employer.
Less admin – Paying super when you run payroll means no more quarterly payment crunches.
Fewer compliance risks – ATO data-matching will pick up issues faster, helping you avoid penalties before they snowball.
Smoother cash flow management – Paying smaller, regular amounts of super is often easier to manage than large quarterly sums.
The ATO will take a “risk-based” approach for the first year, focusing on education and helping businesses transition smoothly. If you pay on time, you’ll likely be flagged as low risk, meaning fewer compliance checks.
How to Get Ready — Practical Steps to Take Now
You’ve got time before the rules kick in, but the smart move is to prepare early. Here’s how:
1. Check your payroll software.
Most systems like Xero (or MYOB, or QuickBooks) already support payday-aligned super. Confirm your setup and check if any updates or integrations are needed.
2. Map your pay cycles.
Calculate the seven-day payment window based on your payroll frequency (eg. fortnightly).
3. Brief your team.
Make sure whoever manages payroll understands the changes. Have them attend training webinars.
4. Plan your cash flow.
Consider shifting from quarterly to more regular payments now to get used to the timing. Smaller, frequent super payments can reduce cash flow shocks.
5. Monitor and review.
Set up a monthly check to ensure super contributions have cleared correctly.
If you outsource payroll, contact your provider soon — many are already updating systems for Payday Super and can help you make a seamless switch.
The Bottom Line
Payday Super isn’t just a compliance change — it’s an opportunity to make your payroll more efficient. With the laws now passed and under 6 months to prepare, it’s time to get ahead of the curve.
If you’d like help reviewing your payroll setup or planning the transition, get in touch with our team — we can help you make sure your business is ready to go when Payday Super commences.
Keep up to date with the progress of Payday Super at ato.gov.au/paydaysuper.
Qualifying earnings – The New Super Benchmark
Qualifying earnings (QE) are the types of payments made to employees that are used to calculate their super guarantee (SG) under Payday Super.
QE includes:
ordinary time earnings (OTE), i.e. payments for ordinary hours of work including certain types of paid leave, allowances, bonuses and lump sum payments.
all commissions paid to an employee
salary sacrifice amounts that would qualify as QE had they not been sacrificed to superannuation.
earnings paid to workers who fall under the expanded definition of employee, including payments to independent contractors paid mainly for their labour.
What does QE mean for employers
From 1 July 2026 all employers will use qualifying earnings (QE) as the base to calculate both the SG amount and the super guarantee charge (SGC). Currently employers calculate SG and SGC on different earnings bases.
For many employers, the new concept of QE doesn’t change the amount of SG you are currently paying for your employees.
Most employees are eligible for SG. Independent contractors paid mainly for their labour are considered employees for SG purposes.
When to start reporting QE in STP
From 1 July 2026, employers will be required to report the year-to-date amount of QE for each employee through their STP reporting each payday.
Employers will also have to report the year-to-date super liability for that employee.
Reporting payments made to independent contractors
It isn’t mandatory to report payments made to independent contractors paid mainly for their labour in STP. You’ll need to confirm their eligibility for super.
If you do choose to report for these workers, you'll need to report both QE and super liability.
Changes to reporting in STP
From 1 July 2026
It is mandatory to report each eligible employee’s QE and super liability.
STP reports that don’t include both amounts by 1 July 2027 will be rejected.
Why both QE and super liability are reported
QE replaces OTE as the base for calculating an employer’s SG payments.
An employer may have additional obligations to pay super under an industrial instrument, such as an award or agreement. These amounts may not be QE but can continue to be reported as super liability in STP.
Read More from the ATO here.
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Contact our team to set up your account today.
If any of the above raises questions for you or your business, please contact our office.
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