The Government has officially passed the Payday Superannuation legislation, representing the most significant change to employer superannuation obligations in decades. These reforms aim to ensure employees receive their superannuation in real time and to reduce the volume of unpaid or late super across Australia.

Below is a detailed summary of what has been legislated and what employers need to prepare for ahead of the 1 July 2026 start date.

What Has Been Passed

The Treasury Laws Amendment (Payday Superannuation) Bill 2024 has now passed Parliament. Key outcomes include:

1. Superannuation must be paid on payday

• From 1 July 2026, all employers will be required to pay superannuation guarantee (SG) contributions at the same time they pay wages and salaries.
• The employee’s super fund must receive the contributions within 7 business days of payday.
• This replaces the current quarterly SG payment model.

2. Introduction of “Qualifying Earnings” (QE)

• SG will be calculated on new prescribed “Qualifying Earnings”.
• QE aligns closely with ordinary time earnings (OTE), but introduces more formal definitions to reduce ambiguity in SG calculations.
• Employers will need to ensure payroll systems apply the updated definitions correctly from July 2026.

 3. Stronger compliance and penalties

The Government has strengthened the Superannuation Guarantee Charge (SGC) regime, including:

• A revised “administration uplift” replacing the current flat-fee component.
• Continued interest and penalties for late or unpaid SG.
• Additional penalties for failing to lodge SGC statements on time.
• Increased ATO enforcement powers, consistent with Treasury’s reform objectives of reducing the ~$3.6 billion in unpaid super.

 4. Removal of the Small Business Superannuation Clearing House (SBSCH)

• The current free SBSCH will be retired from 1 July 2026.
• Small businesses using the SBSCH must move to a commercial clearing house, payroll software with integrated clearing, or alternative payment solution before this date.

5. Aligning SG with emerging data systems

• Payday Super works in conjunction with Single Touch Payroll (STP) Phase 2 reforms.
• ATO digital systems will be upgraded to match each SG payment with payroll data in near-real time, improving detection of missed or incorrect contributions.

Why This Reform Has Been Introduced

According to Treasury and the Minister for Treasury:

• Millions of Australians experience unpaid or delayed super each year under the quarterly model.
• More frequent payments will help ensure SG is paid correctly and on time, particularly for:

- casual workers

- part-time employees

- workers with multiple jobs

• Employees' super balances benefit from compounding returns sooner when paid regularly.
• The Government expects real-time monitoring to significantly reduce systemic non-compliance.

What Employers Need to Do Before 1 July 2026

Although the start date is over 6 months away, preparation should begin now. Employers should:

1. Review payroll frequency and processes

• Ensure your payroll cycle (weekly, fortnightly, monthly) can support SG calculations every pay cycle.
• SG must now be processed in the same event as payroll.

 2. Confirm payroll software capability

Speak to your payroll or accounting platform about:

• automated SG calculation on Qualifying Earnings
• automated per-pay-cycle SG payments
• integration with commercial clearing houses
• ability to meet the 7-day fund receipt requirement

Most major software providers have already committed to supporting Payday Super.

3. Plan for more frequent cash outflows

• Quarterly super payments will transition to monthly, fortnightly, or weekly payments depending on payroll cycle.
• Employers should begin modelling cashflow to ensure SG can be remitted on time every pay period.

 4. Transition away from the SBSCH

• Businesses using the SBSCH should start assessing replacement clearing services well ahead of July 2026.
• Clearing times vary by provider — this will matter under the new 7-day requirement.

 5. Strengthen internal compliance

• Inaccurate employee super fund details, delayed payroll cycles, or reconciliation issues will now have bigger consequences.
• The revised penalty regime increases the risk exposure for employers who miss deadlines or lodge SGC statements late.

6. Ensure employee data is accurate

• Super fund details, stapled fund information, and TFN declarations must be collected and verified correctly during onboarding.
• STP reporting and SuperStream standards must be followed precisely.

Looking Ahead

The ATO will publish further administrative guidance, practical compliance approaches, and updated SGC rules as the implementation date draws closer. Treasury has also confirmed that additional digital tools will be released to assist employers in transitioning to the Payday Super framework.

We will continue to keep clients informed as more detail becomes available.