Payday Super: Key Changes for Employers

Payday Super: What Business Owners Need to Know to Stay Compliant

Superannuation obligations are about to change, and employers need to prepare. The Federal Government has announced an overhaul of the superannuation guarantee (SG), known as payday super. From 1 July 2026, employers will need to pay SG contributions on the same day as their employees’ wages. This is a significant shift from the current quarterly payment model.

While payday super is not yet law, businesses should understand its implications to avoid penalties and manage cashflow. In this article, we explain the details of payday super, its potential benefits, and what business owners need to do to stay compliant.

What is Payday Super?

Payday super will require employers to pay their employees’ superannuation guarantee contributions at the same time as wages or salaries are paid. Currently, employers make SG payments quarterly, which can create significant delays in employees’ retirement savings.

The rationale for this change is clear. According to Government estimates, unpaid super affects approximately $3.4 billion worth of employee entitlements each year. By aligning super payments with pay cycles, employees will benefit from consistent contributions, improved investment returns, and fewer risks of unpaid super.

For example, a 25-year-old earning a median income could be 1.5% better off at retirement if they receive SG payments fortnightly instead of quarterly.

How Will Payday Super Work?

Under payday super, the super guarantee payment deadline will shift to seven days after wages are paid. This means that employers must ensure the SG contributions are received by employees’ super funds within that time frame.

The key points to note include:

Employers will pay SG based on ordinary time earnings (OTE).
Exceptions apply for new employees (SG contributions can be delayed for the first two weeks) and small irregular payments.
Single Touch Payroll (STP) reporting systems will likely be updated to streamline compliance.

These changes aim to simplify processes while ensuring employees receive their super contributions in line with their wages.

The Cashflow Impact for Employers

For many employers, the main challenge will be managing cashflow. Under the current system, businesses can hold onto SG contributions until 28 days after the end of the quarter. From 1 July 2026, you must pay those funds out with every pay cycle.

If your business already faces tight cashflow, you will require careful planning to ensure compliance without financial strain. Employers may need to adjust budgets, review payroll systems, and adopt strategies to smooth out cashflow.

The upside is that payday super helps businesses avoid accumulating SG debts over time. So, when super is paid on time, it reduces the risk of penalties, particularly if a business becomes insolvent.

Penalties for Late Super Payments

The penalties for underpaying or failing to pay superannuation guarantee contributions are already severe. Under payday super, these penalties will continue—and may even escalate.

Currently, if you pay SG is late, employers face a super guarantee charge (SGC) that includes:

The unpaid super shortfall.
10% interest per annum on the shortfall.
A $20 administration fee per employee, per quarter.

Unlike regular SG contributions, SGC payments are not tax-deductible, making late payments even more costly.

Under the proposed system, employers who repeatedly fail to comply may face larger penalties, including:

Notional earnings: Compounding interest on unpaid SG amounts.
Administrative uplift: An additional charge (up to 60%) for enforcement costs.
SG charge penalties: Fines of up to 50% of outstanding SG amounts if unpaid after notice.

The key takeaway? Super payments must be prioritised to avoid spiralling costs. Failing to comply can quickly result in financial penalties that outweigh the cost of timely contributions.

What Employers Should Do Now

Although payday super does not come into effect until 2026, employers should start preparing now. Here are the steps to get ready:

Review Your Payroll Systems
Ensure your payroll system can integrate superannuation contributions with pay cycles. Talk to your software provider about upcoming updates to Single Touch Payroll (STP) reporting.
Assess Cashflow Impact
Analyse your business’ cashflow and budget to determine the financial impact of more frequent SG payments. Consider strategies to improve cashflow stability ahead of the changes.
Train Your Team
Educate your HR and payroll teams on the impending changes to SG obligations. Ensuring everyone understands payday super will minimise compliance risks.
Consult a Professional
Speak with your accountant or financial adviser about managing employer superannuation obligations. Early preparation will help you navigate payday super smoothly.

Why Payday Super Matters

Payday super is not just about compliance; it is about protecting employees’ retirement savings. For employees, the benefit is clear: they will receive their super faster, boosting long-term retirement outcomes. For businesses, it means ensuring compliance and avoiding costly penalties.

Expert Tip: Businesses need to view payday super as an opportunity to tighten up payroll processes. It’s about cash flow management and employee trust. By preparing early, employers can avoid penalties and focus on growing their business.

The Bottom Line

Payday super represents a major shift in how businesses meet their superannuation obligations. By moving to same-day super payments, the Government aims to close the $3.4 billion gap in unpaid entitlements and improve retirement outcomes for Australian workers.

For business owners, the key to avoiding penalties lies in preparation. Start reviewing your systems, managing cashflow, and seeking expert advice now. Payday super may not be law yet, but waiting until the last minute could cost you.

Stay ahead of the change and keep your business on track for payday super compliance. Your employees’ future—and your bottom line—depends on it.

Need help preparing for payday super? Contact DJ Grigg Financial today for expert advice and support tailored to your business needs.