Payday Super is Coming. Now Is the Time to Act

The Australian Government has officially passed the Payday Super legislation. This means that from 1 July 2026, employers will be required to pay employees’ superannuation contributions at the same time as their salary and wages.

This is a major shift from the current system, where super is typically paid quarterly, which will have significant implications for cash flow, payroll processes, and compliance.

What is changing?

Under the current rules, superannuation guarantee (SG) contributions are due 28 days after the end of each quarter. From 1 July 2026, these contributions must be made each pay cycle, alongside employees’ wages.

For example, if you pay staff weekly or fortnightly, you will need to pay contributions to their super fund weekly or fortnightly as well.

In addition to this major shift, several related changes are being introduced:

Shorter processing timeframes

Super funds will soon be required to process or return contributions within three business days, instead of the current 20-day timeframe. This means that any errors, such as incorrect employee details or fund information, will be detected much sooner.

To support this, the government is upgrading the digital systems that handle super payments so contributions can move faster and more securely between employers and funds. These improvements will also make error messages clearer, helping businesses and payroll providers fix issues quickly and avoid delays.

Super Guarantee Charge for late payments

Employers may incur Superannuation Guarantee Charge (SGC) penalties if employee super contributions don’t reach the fund within seven days of payday. Payday is the date that an employer makes a qualifying earnings (QE) payment to an employee. It won’t be enough to simply make the payment, funds must clear and be received on time. If a SGC is incurred, the superannuation contributions will be not tax deductible.

Free clearing house to be phased out

The ATO’s Small Business Superannuation Clearing House will be discontinued ahead of the new regime. Employers who have relied on the clearing house to process payments will need to ensure their payroll or accounting software (such as Xero) is set up to make direct payments through SuperStream.

Together, these changes are designed to make super contributions faster, more transparent, and easier for employees to track, but they will also require employers to tighten up payroll and cash flow processes.

Why the change?

The Government’s goal is to improve retirement outcomes for Australians by ensuring super is paid more frequently and reducing the risk of unpaid, missing or underpaid super contributions. According to the ATO, more frequent payments will make it easier for employees to track their super in real-time and ensure compliance across businesses.

What Payday Superannuation will mean for your business

For many employers, this change will require updates to payroll systems and processes. Some of the main impacts include:

Cash flow management

Moving from quarterly to payday super will change the rhythm of your business cash flow. Instead of only paying employees superannuation funds every three months, you’ll need to have the funds available each pay cycle. This means tighter forecasting and a clearer view of upcoming pay runs will become essential.
While it may feel like an extra pressure at first, the shift can help create stronger cash flow discipline and reduce the size of large quarterly outflows.

Payroll software updates

Your payroll software will play a significant role in meeting the new Payday Super obligations. The good news is that most leading platforms, like Xero, are already equipped to handle compliant super payments through SuperStream. Xero simplifies the payroll process, automating a lot of the admin work for you, like automatically calculating and paying superannuation contributions for each employee directly into their super funds.

It’s a good idea to review your payroll settings ahead of time and check in with your accountant or bookkeeper to confirm everything will be ready for payday super by 1 July 2026.

Bookkeeping and compliance

More frequent super payments mean there will be less room for error or delay. Employers will need to ensure that their bookkeeping processes are aligned with each pay run, and that the funds are available at the time of payment.

This may also increase the importance of regular reconciliations and oversight to ensure payments are processed correctly and on time. Staying compliant will be easier with clear systems in place from the beginning.

Reduced risk of penalties and interest

On the upside, paying super at the same time as wages reduces the likelihood of missing quarterly deadlines or accruing super guarantee penalties and interest. It also provides employees with greater visibility over their contributions in real time, which can build trust and transparency.

In the long run, this shift should simplify super obligations, giving business owners more confidence that their compliance is always up to date.

How to prepare now

With only a matter of months to prepare, it's important to:

1. Review your payroll software. Check if your system can support more frequent super payments or if updates will be needed.
2. Assess your cash flow. Start forecasting to understand the impact of paying super with every pay run.
3. Communicate with your bookkeeper or accountant. Early planning will make the transition smoother and ensure compliance from day one.
4. Stay informed. The Australian Taxation Office (ATO) and software providers will release further guidance and tools closer to the implementation date to help prepare you to pay super contributions each payday.

Need help getting ready?

At Bonerath & Co, we’re helping businesses prepare for Payday Super. We can help with understanding how the changes will affect cash flow to setting up the right systems to stay compliant.

We can get your payroll and superannuation processes set up correctly in Xero, ensure your bookkeeping and reporting meet compliance standards, and even offer a 25% discount on Xero subscription for clients.

If you’d like to discuss how to prepare your business ahead of the 1 July 2026 start date, get in touch with our team. We’re here to make the transition smooth and stress-free.

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