What Is Payday Super?
The Government is introducing Payday Super, changing when employers must pay superannuation.
Current System
• Super paid quarterly
• Due 28 days after quarter end
From 1 July (subject to legislation)
• Super must be paid within 7 days of each pay run
Super will move from a quarterly obligation to an ongoing payroll responsibility, aligning super payments more closely with wages payment.
Cash Flow Impact
The key change is timing. In July, businesses will likely need to pay the June quarter super (due for payment before 28 July) while also beginning to pay July super within 7 days of payroll. This may create a short-term cash flow squeeze.
- Employers will have less flexibility around the payment date for their superannuation
- Employers will need to fund super at each payroll cycle
- Greater focus on accurate payroll processing
- Stronger cash flow planning required
Preparing before 30 June is critical.
Key focus areas will include:
- Familiarise yourself with the changes in your payroll software to facilitate Payday Super (see Software Updates below). If your payroll provider does not allow you to make superannuation contributions directly through their software or has not refined the process so that it only takes a few extra clicks, please talk to our Team about what other options may be available.
- If you are currently using the ATO Small Business Clearing House to pay your superannuation, you will need to find an alternative clearing house prior to 30 June 2026 (the ATO Small Business Clearing House is closing and will not accept contributions after 30 June 2026).
- Ensure that payroll data is entered into your software in a timely means, and that the data is accurate, to ensure the information transmitted to the ATO for superannuation contributions is correct. If you or your bookkeeper normally back date the entries into your payroll software at the end of the month or quarter, and report your STP data late, this process will need to change.
- Work out a process to ensure that you can identify and fix errors quickly with superannuation payments. There are penalties for late superannuation payments.
The ATO has indicated a risk-based approach to its reviews during the changeover period:
- Businesses that pay on time and correct mistakes promptly will be considered lower risk
- Repeated late or incorrect payments may attract increased ATO attention
The ATO will not just look at whether super is eventually paid, but how consistently and accurately employers meet their obligations.
Software Updates
Xero – Payroll updates, enhanced clearing, compliance reminders
QuickBooks – More frequent super processing, cash flow tools
MYOB – Compliance updates, improved SuperStream integration
Software will support the change, however correct setup, funding and monitoring remain the employer’s responsibility.
What Should You Do Now?
- Review payroll processes
- Check employee super fund details
- Confirm clearing house settings
- Update cash flow forecasts
- Build a short-term super buffer
- Ensure payroll staff understand the 7-day rule
If Something Goes Wrong
Late super may trigger the Super Guarantee Charge (SGC), which is not tax deductible and may include interest and penalties. The ATO has indicated compliance monitoring in the first year. Act quickly to correct errors and seek advice if needed.
Key Takeaway
Payday Super strengthens employee protections and ensures superannuation is paid more consistently, but it also places greater responsibility on businesses to manage cash flow and process payroll on time. Preparing early will help minimise disruption and ensure compliance. If you would like support reviewing your payroll processes or assessing the impact on your business, please contact our office.
