Countdown to Payday Super for Employers
It is estimated that over $6 billon in unpaid super. In addition, it is estimated that there is approximately $18.9 billion in lost and unclaimed superannuation held by the Australian Tax Office. Because of this the new Payday Super is now law.
From 1 July 2026, employers must pay super at the same time as salary and wages, and contributions need to reach the employee’s fund within seven business days of payday. Super must be received within this time, not just submitted, so please allow time for processing by your payroll platform.
From 1 July 2026 all employers will use qualifying earnings (QE) as the base to calculate both:
· Superannuation Guarantee (SG) contributions
· Superannuation Guarantee Charge (SGC) for late payments
QE replaces the previous ordinary time earnings (OTE) from this date.
Qualifying Earnings (QE)
Qualifying earnings (QE) includes:
ordinary time earnings (OTE), i.e. payments for ordinary hours of work, including certain types of paid leave, allowances, bonuses and lump sum payments
all commissions paid to an employee
salary sacrifice amounts that would qualify as QE had they not been sacrificed to superannuation
earnings paid to workers who fall under the expanded definition of employee, including payments to independent contractors paid mainly for their labour.
From 1 July 2026, employers are required to pay employees superannuation guarantee within seven days of payday. The SG rate will remain at 12% from 1 July 2026.
Late Payments will result in Super Guarantee Charge (SGC)
The SGC applies when amounts aren’t received by a super fund within 7 business days of payday. The SGC:
is assessed by the ATO
is calculated based on QE
includes interest that compounds daily at the general interest charge rate
includes an administrative uplift, which can vary based on an employer’s history of meeting super guarantee obligations and may be reduced by a voluntary disclosure
May attract penalties are 25% or 50% of the unpaid SGC, depending on any prior penalties
While SGC is not tax deductible, the superannuation component of this payment may become deductible once paid to the employee’s fund.
Cash Flow Implications
Currently small business employers can pay SG superannuation quarterly, allowing these funds to remain in the business for up to three months. Under the new Payday Super legislation, employers will need to pay every pay cycle, so reviewing the cash flow implications of this and budgeting in advance is recommended.
Closure of Small Business Super Clearing House (SBSCH)
The SBSCH will close on 1 July 2026 as part of the payday super reforms. If your business still uses the SBSCH, you’ll need to transition to a payroll solution that automates super payments. It’s a good idea to plan your move soon to learn a new system and stay compliant when Payday Super starts on 1 July 2026.
Important Dates
· Pay March quarter super contributions by 28 April 2026
· Pay June quarter super contributions by 28 July 2026
· From 1 July 2026 super contributions need to be made each payday
Checklist for Employers
· Review your business cash flow and the impact of payday super from 1 July 2026
· Review your payroll system to ensure it complies with Payday Super
· Review employes awards and payments to establish what is classified as QE
· Review your contractor arrangements for any superannuation liability
· From 1 July 2026 start processing your superannuation obligations via your super clearing house with your payroll schedule
· Transition from the ATO SBSCH if this is currently used
As an employer, if you are unsure on your transition to Payday Super and your obligations reach out early if you would like assistance.