What is Payday Super?
From 1 July 2026, Australia will change how the Super Guarantee (SG) is calculated and paid: super must be paid on every payday, not just quarterly; eligibility expands via a new definition called Qualifying Earnings (QE), which includes Ordinary Time Earnings (OTE) and other payments. (softwaredevelopers.ato.gov.au)
Key Changes Employers Need to Know
| Change | What’s New | Implications for Employers |
|---|---|---|
| Payment Frequency | SG must be paid at the same time as salary and wages | Payroll systems must be updated to process SG alongside wages for each pay period. (softwaredevelopers.ato.gov.au) |
| Qualifying Earnings | Includes OTE + other earnings components | Must adjust your payroll rules, collect data on bonuses, allowances, etc., to calculate SG correctly. |
| Payment Timing | Contributions must reach super fund within 7 business days (unless extended timeframe for new hires) | Employers must ensure banking/payment instructions are clear; funds must arrive quickly. |
| Reporting & Codes | DSPs must add a new code “Q” in Single Touch Payroll (STP) for QE; revised validation & SuperStream standards apply | If your software doesn’t support the new code or validation rules, switch vendors or update systems now. |
| Allocation & Fund Validation | Super funds get 3 business days to allocate or return contributions; funds must be validated early | Employers should monitor funds’ details actively; validate via Fund Validation Service (FVS). |
Action Plan for Employers & Payroll Providers
- Perform a payroll audit: identify all earnings that fall under QE and list all pay elements.
- Update payroll templates and STP software to include code Q and revised validation rules.
- Confirm payment workflows that allow for 7-business-day delivery of super contributions and start allocating super immediately.
- Engage with your super fund(s): ensure they accept contributions under the new standard and that bank details are up to date.
- For businesses using Small Business Super Clearing House (SBSCH), transition to alternative methods by 30 June 2026, when SBSCH will permanently close. (ato.gov.au)
Real-World Example
ABC Café pays wages fortnightly and bonus payments quarterly. Under Payday Super:
- ABC must include bonus payments (if part of “other payments”) when calculating QE.
- Super must be paid every fortnight, matching the pay cycle.
- Funds must reach the employee’s super fund within 7 business days.
- Any delay or incorrect fund details could lead to penalties under the SG Charge rules.
Why It Matters
Failing to meet Payday Super requirements exposes employers to:
- Increased SG Charge liabilities, including interest and penalties.
- Reputational risk with employees and funds.
- Operational disruptions from updated reporting obligations.
Bottom line: align your payroll systems, update settings, validate funds and start practising Payday Super workflows well before 1 July 2026 to avoid scramble at the last minute. Ready, set, convert!