Payday Super – New Rules from 1 July 2026 

From 1 July 2026, all Australian employers will be required to pay their employees’ superannuation guarantee (SG) at the same time as wages. This change is known as “Payday Super”.

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This change represents one of the biggest shifts in employer super obligations in years, with significant cashflow and compliance impacts, especially for small businesses. It replaces the familiar pattern of “pay wages weekly, pay super quarterly” with a requirement to deal with super every single pay run.

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At C&O Accountants, we are helping clients understand these changes now so there are no surprises later.

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How Payday Super will work

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​From 1 July 2026:

• Calculate per cycle: You must calculate super every pay cycle (weekly, fortnightly, or monthly – whatever your normal pay run is).

• Pay on payday: Compulsory contributions for most employees must be paid to their super fund at the same time as "qualifying earnings" (QE) are paid.

• Received within 7 days: To be considered "on-time," contributions must be received by the employee’s super fund within seven business days of payday. (A limited 20-business-day extension applies for a new employee’s first payment).​

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To support this, updated SuperStream rules will require funds and SMSFs to receive contributions via the New Payments Platform (NPP), enabling faster processing—often within the same day.

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What happens if you pay late?

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If a contribution isn’t received in the employee’s fund in time:

• A Superannuation Guarantee Charge (SGC) will apply for that QE day.

• The ATO assesses the SGC using new rules aligned with Payday Super.

Key features of the updated SGC:

• Based on qualifying earnings (QE)
  SGC is calculated using the same QE concept that applies to super.

• Notional earnings (interest)
  Interest is calculated daily at the general interest charge (GIC) rate, on a compounding basis, to compensate the employee for late payment.

• Administrative uplift
  An additional administrative uplift of up to 60% of the shortfall and notional earnings can apply. This uplift is reduced where the employer lodges a voluntary disclosure and has a good compliance history.

• Voluntary disclosure statement (VDS)
  The current mandatory SGC statement is being replaced with a voluntary disclosure statement for periods after 1 July 2026.
  Lodging a VDS before the ATO raises an assessment can significantly reduce the administrative uplift.

• Tax deductibility
  Under the Payday Super reforms, the SG charge itself is tax-deductible, aligning late super with on-time contributions.
  However, late payment penalties and post-assessment interest will not be deductible.

• Late payment penalty (25% / 50%)
  If an assessed SGC is not paid within the required timeframe, a late payment penalty can apply:

  • 25% of the unpaid SGC in most cases

  • 50% if the employer has already had a penalty in the previous 24 months

Overall, the longer super remains unpaid, the more expensive it becomes.

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Small Business Superannuation Clearing House (SBSCH) changes

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As part of Payday Super:

• The ATO’s Small Business Superannuation Clearing House (SBSCH) will be closed to new employers from 1 October 2025, and

• The SBSCH will be fully retired from 1 July 2026. Existing users will need to move to a commercial clearing house or another suitable payroll solution before that date.

If you currently rely on the SBSCH, this change will affect how you pay super, not just when you pay it.

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What employers should be doing now

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To prepare for Payday Super, employers should:

• Review their pay cycles and understand how weekly, fortnightly or monthly runs will work with super due within 7 business days of payday.

• Confirm that payroll software and super payment methods will support Payday Super, including any move away from the SBSCH.

• Update internal payroll and super procedures, including who is responsible for checking and paying super on time.

• Revisit cashflow forecasts and working capital, as super will no longer sit unpaid for up to a quarter.

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Need help?

If you’re unsure how Payday Super will affect your business, please contact C&O Accountants.

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Important: The information above is general in nature and does not take into account your specific circumstances. It is not legal advice. You should seek professional advice before acting on any of the matters discussed.

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ATO Payday Super fact sheet

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