From 1 July 2026, the way employers pay superannuation guarantee will change significantly. Under the new Payday Super rules, employers will generally need to pay employees’ super at the same time as wages, rather than paying super quarterly.
With the start date now only weeks away, this is no longer a future planning issue. Employers should be checking their payroll systems, super payment processes, employee fund details and cashflow arrangements now to ensure they are ready for the first pay run under the new rules.
For many businesses, Payday Super will be a major shift in payroll timing, administration and compliance. Super will need to be treated as part of each pay cycle, not as a quarterly task completed after wages have already been paid.
What is Payday Super?
Payday Super means employers will need to make superannuation guarantee contributions for eligible employees each payday. The contribution must generally be received by the employee’s super fund within 7 business days after payday.
This is different from the current system, where super guarantee contributions are generally paid quarterly.
The key point is that the contribution must reach the employee’s super fund on time. If you use payroll software or a commercial clearing house, you will need to allow enough processing time so that payments are received by the super fund within the required timeframe.
In practical terms, super will become part of the normal payroll cycle. Each pay run will need to include the calculation, reporting and payment of super.
Why the change matters
The Payday Super reforms are designed to reduce unpaid or late-paid super and make super entitlements easier to track. For employees, this should mean super is paid more regularly and is easier to reconcile against wages.
For employers, the change means super can no longer be treated as a quarterly compliance task. Businesses will need to make sure their payroll systems, employee records, cashflow and internal processes are ready before the first payday after 1 July 2026.
Employers who currently set aside super quarterly will need to consider how more frequent payments will affect cashflow. Businesses that pay employees weekly or fortnightly may feel this change more than those already paying super monthly or more regularly.
Ordinary time earnings will transition to qualifying earnings
Another important change is the move from ordinary time earnings, or OTE, to qualifying earnings, or QE.
Currently, super guarantee is generally calculated on ordinary time earnings. From 1 July 2026, employers will use qualifying earnings as the base for calculating super guarantee under Payday Super.
For many employers, this may not substantially change the amount of super they pay. However, it is still important to review payroll categories and pay items to make sure the correct earnings are included.
Qualifying earnings will generally include ordinary time earnings, certain salary sacrifice amounts, commissions and other amounts that are required to be included for super guarantee purposes. Payroll software should be updated to help employers report qualifying earnings correctly through Single Touch Payroll.
This is a good time to review your payroll setup, particularly if you have allowances, commissions, bonuses, salary sacrifice arrangements or other pay categories that may need to be checked.
What employers should do now
Employers should now be finalising their preparations before 1 July 2026. Key steps include:
- reviewing payroll software to confirm it will support Payday Super;
- checking how super payments will be made each payday;
- confirming whether your clearing house or payroll provider can process payments within the required timeframe;
- checking employee super fund details are current;
- reviewing cashflow processes to allow for more frequent super payments;
- checking pay categories and payroll mapping for qualifying earnings;
- reviewing contractor arrangements; and
- making sure SMSF details are complete and up to date, where relevant.
The deadline is not just 1 July 2026. Businesses should aim to have their payroll systems, employee data and payment processes tested before the first pay run in the new financial year.
Important deadline for SBSCH users
If you currently use the Small Business Superannuation Clearing House, or SBSCH, you will need to transition to another payment solution.
The SBSCH will close as part of the move to Payday Super. Employers currently using the SBSCH should download any records they wish to keep before 30 June 2026, as there will be no access after this date.
This includes contribution history, payment records and any other information you may need for your business records.
Do not leave this until the final day. Businesses should choose and set up an alternative SuperStream-compliant payment method before the SBSCH closes, and make sure the new process works before Payday Super starts.
Contractors and Payday Super
Payday Super does not change the basic rules about whether super is payable for a contractor.
In many cases, businesses are not required to pay super for genuine independent contractors. However, some contractors are treated as employees for superannuation guarantee purposes, particularly where they are paid mainly for their labour.
The important point is this: if you are currently required to pay super for a contractor, you will still need to pay super for that contractor under Payday Super.
From 1 July 2026, where super is required for a contractor, the timing rules will apply. This means the super contribution will generally need to be received by the contractor’s super fund within 7 business days after the relevant payment is made.
Businesses should review contractor arrangements now and confirm whether super is currently required. If you report contractors through Single Touch Payroll, you should also check how qualifying earnings and super liability will be reported from 1 July 2026.
SMSFs need to be ready too
If employees have their super paid into a self-managed super fund, or SMSF, it is important to check that the SMSF is ready to receive contributions under Payday Super.
SMSFs receiving employer contributions generally need correct and current fund details, including an active electronic service address, or ESA. The SMSF’s bank account details, ABN and fund status should also be checked.
With tighter payment timeframes, incorrect SMSF details may cause payment delays or returned contributions. Employers should ask employees with SMSFs to confirm their details before Payday Super starts.
SMSF trustees should also check that their ESA provider will support the updated SuperStream requirements and that the fund’s bank account can receive payments efficiently.
What happens if super is late?
Under Payday Super, timing becomes much more important. A contribution will generally be late if it is not received by the employee’s super fund within the required timeframe.
Late super can result in additional reporting obligations, super guarantee charge consequences and potential penalties. Because the system will rely heavily on payroll reporting and fund matching, errors in employee details or payment references may create compliance issues more quickly than under the quarterly system.
The best way to reduce risk is to make sure payroll records are accurate, payment processes are tested and super is treated as part of every pay run.
Final thoughts
Payday Super is one of the biggest changes to employer super obligations in years, and it starts on 1 July 2026. Employers should now be finalising their payroll systems, employee super details, contractor arrangements, SMSF information, cashflow planning and payment processes.
Where possible, employers should also consider paying their April to June 2026 quarter super before 30 June 2026. This is crucial if businesses wish to claim a deduction for the super paid in their 2026 tax return. We also consider this an important step to ensure a cleaner transition from the quarterly super system to Payday Super, helping ensure payments are allocated to the correct period.
For SBSCH users, the immediate priority is to move to a new super payment solution and download any records you wish to keep before 30 June 2026.
Taking action now will help reduce disruption, avoid late payments and make the transition to Payday Super much smoother.
If you need help reviewing your payroll setup or preparing your business for Payday Super, please contact our office.
