With so much noise in the media at the moment about the Federal Budget, we want to remind business owners about some significant changes to superannuation that must be actioned now before the end of financial year.
“PayDay Super” comes into effect from the 1st July 2026, which means:
- If you're responsible for running payroll, you need to start preparing now.
- If you're an employer, you'll want to review your cashflow requirements from July
- If you're an employee on a high income, these changes may affect you in the FY27 tax year (no action required now, but book your tax planning session with us in advance).
From 1 July 2026, employers must pay their employees’ super at each payday.
This means increased super payments which, depending on payroll timing, could be monthly, fortnightly or weekly.
The benefits?
This reform will strengthen the retirement income of millions of Australian workers, with timely super payments. The ATO will be able to more effectively identify employers who are not doing the right thing by their employees.
The impact?
While this reform has positive long-term benefits, there are significant administrative & cashflow implications for businesses in the short-term that must be effectively managed.
Snapshot of key changes:
This means increased super payments which, depending on payroll timing, could be monthly, fortnightly or weekly.
- Employers must pay super for their employees at the same time as each payday cycle.
- Super payments must reach super funds within 7 business after each payday (some exceptions apply).
- Qualifying Earnings” or QE becomes the new framework for calculating total contributions.
- All businesses need to switch to a new system before the ATO closes this facility at the end of June.
- Employers will report both QE and super liability amounts through Single Touch Payroll.
- Employers who don’t pay the right amount, on time, or to the correct fund, may need to pay the super guarantee charge (SGC). Ouch!!
We've complied a PayDay Super guide that outlines the changes, required actions for employers, and a planning checklist pre-EOFY.
If you need a quick overview and action planning list, we recommend downloading the PayDay Super Guide first as a reference, then access the more detailed information relevant for your business situation from the ATO hub
The Small Business Clearing House (SBCH) is closing on June 30. If you currently use that system to process superannuation, you'll need to switch to a new solution. The ATO has outlined a list of software providers that comply with the new PayDay Super rules.
If you're a client of ours, we can advise the best-suited scenario for your business.
