On 9 October 2025, the Government introduced legislation to Parliament to align superannuation guarantee (SG) contributions with employee pay cycles. Commonly referred to as Payday Super, this reform is designed to reduce unpaid super by requiring contributions to be paid at the same time as ordinary time earnings (OTE).
Key changes proposed from 1 July 2026:
- Same-day payment: SG contributions must be paid on the day wages are paid.
- Late payment definition: Contributions reaching funds more than seven working days after OTE are considered late.
- SG charge basis: Calculated on OTE, not salary.
- Administrative uplift: Initial uplift of 60%, with voluntary disclosure available to reduce penalties.
- Tax treatment: On-time, late payments and SG charges remain deductible.
ATO’s first-year guidance (PCG 2025/D5):
- Low risk: Employers paying on time but fixing rejected payments promptly.
- Medium risk: Employers continuing quarterly SG payments.
- High risk: Employers with insufficient contributions or ongoing non-compliance.
Practical next steps for employers:
- Transition away from the ATO Small Business Superannuation Clearing House before 30 June 2026.
- Monitor the Bills as they progress through Parliament.
Payday Super marks a significant shift towards real-time compliance. Employers should act now to review payroll systems and processes to ensure readiness by July 2026.
Disclaimer: Any advice on this site is general nature only and has not been tailored to your personal objectives, financial situation and needs. Please seek personal advice prior to acting on this information. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your objectives, financial situation or needs.
