How Payday Super Could Affect Employers and Employees
Superannuation is set for a major shake-up. The proposed “payday super” reforms from the Labor government would require employers to pay superannuation contributions within seven calendar days of each payday, starting 1 July 2026.
With draft legislation now open for consultation, it’s worth understanding how these changes could impact you.
Why the Change?
According to the ATO, an estimated $5.2 billion in super went unpaid in 2021–2022. Payday super aims to:
- Improve the timeliness and visibility of super payments
- Reduce unpaid super
- Boost retirement savings
For example, a 25-year-old on a median income, currently receiving quarterly super payments, could be around $6,000 better off at retirement if contributions were made on payday.
What Employers Need to Know
- New Payment Deadlines
From 1 July 2026, super must be paid within 7 calendar days of each payday—whether you pay weekly, fortnightly, or monthly. - New Terminology: “Qualifying Earnings” (QE)
This replaces “ordinary time earnings base” and will be used to calculate super contributions and shortfall charges. - SBSCH Closure
The ATO’s Small Business Superannuation Clearing House will close from 1 July 2026. Employers using it must switch to compatible payroll software. - Extended Timeframes for Exceptions
Some flexibility will apply to new employees, out-of-cycle payments, and events like natural disasters. - Redesigned Penalties
The Super Guarantee Charge (SGC) will include:
- Notional earnings (interest)
- Administrative uplifts
- Penalties for fund choice non-compliance
Both on-time and late contributions will remain tax-deductible.
What Employees Can Expect
- Faster growth: More frequent contributions mean your super can start earning compound interest sooner.
- Greater visibility: Easier tracking of whether your employer is up to date.
- Stronger protections: Enhanced enforcement and penalties for unpaid super.
- Faster processing: Funds will need to allocate contributions within 3 business days (down from 20).
What’s Next?
The draft laws are open for public comment until 11 April 2025, with final legislation dependent on the 3 May 2025 federal election.
Employers should start preparing by:
- Reviewing payroll processes
- Considering cash flow impacts
- Planning for alternatives to the SBSCH
Stay updated as the rules may evolve following consultation and the election.
📄 Read the draft legislation: treasury.gov.au/consultation/c2025-627396