Payday Super Legislation Has Passed – What It Means for You
The “payday super” legislation, now passed by Parliament, introduces one of the most significant changes to superannuation in recent years.
From 1 July 2026, employers must pay their employees’ super contributions within seven business days of each payday, replacing the current quarterly payment system.
These reforms are designed to strengthen the superannuation system by helping the ATO identify employers who aren’t meeting their obligations and ensuring employees’ super balances grow more consistently over time.
What Does This Mean for Employers?
If you haven’t started reviewing your payroll systems and processes, now is the time to act.
Implementing payday super will take time — not only for your internal systems but also for your software providers, payment intermediaries, and super funds.
Here are the key changes to prepare for:
- Payment Timeframes
Super contributions must reach your employees’ funds within seven business days of each payday — whether you pay weekly, fortnightly or monthly.
- New Terminology
The current term “ordinary time earnings base” will be replaced with “qualifying earnings (QE)”, which will be used to calculate both super contributions and shortfall charges.
- Extended Timeframes
In some situations, you’ll have 20 business days to make contributions — for example, for new employees or existing staff who switch super funds.
- Closure of the SBSCH
The Small Business Superannuation Clearing House (SBSCH) will close on 1 July 2026.
If you currently use it, you’ll need to transition to suitable payroll software before this date.
- Penalties and Charges
Understand how new penalties and shortfall charges will apply under the system.
The ATO has released draft PCG 2025/D5, outlining its compliance approach for the first year — keep an eye out for the finalised version.
What Does This Mean for Employees?
From July 2026, your employer will pay your super at the same time as your regular pay cycle. This means you’ll benefit from:
- Easier tracking – it’ll be simpler to confirm your super is being paid on time.
- Faster compounding – more frequent contributions can help your balance grow faster.
- Stronger protection – employers face greater penalties for missed payments.
- Quicker processing – super funds must allocate contributions within three business days (down from 20).
What Happens Next?
For employers, start planning now to ensure your systems, payroll software, and processes can handle more frequent super payments. Seek professional advice if needed, and find an alternative to the SBSCH before its closure.
For employees, stay informed — check your payslips and super account regularly to ensure contributions are received. You can also visit the ATO website for updates.
Supporting regulations are still to come, and these may impact how the new payday super regime operates — so keep an eye out for further details in the months ahead.