Overview of Payday Super Reform
Australia has introduced Payday Super, a reform coming into effect from 1 July 2026, changing how superannuation guarantee (SG) contributions are paid: instead of quarterly payments, employers must pay SG each payday. (softwaredevelopers.ato.gov.au)
Key Changes Employers Need to Know
- Qualifying Earnings (QE): The base for SG contributions becomes QE, a broader concept than ordinary time earnings (OTE), including OTE, payments to contractors primarily for their labour, salary-sacrificed amounts, and other remuneration types. (softwaredevelopers.ato.gov.au)
- Timeliness: SG must be received by the employee’s super fund within 7 business days after each payday. Pay cycles and supplier delays need alignment. (softwaredevelopers.ato.gov.au)
- Closure of SBSCH: The Small Business Superannuation Clearing House (SBSCH) will permanently close as at 30 June 2026. Existing users must download records and select another compliant payment method. (ato.gov.au)
- Reporting: STP reporting will be updated to include new codes to report QE, plus year-to-date qualifying earnings and super liability each pay period. Payroll software providers must prepare accordingly. (community.ato.gov.au)
Practical Implications for Employers
| Area | What You’ll Need to Do | Example |
|---|---|---|
| Payroll Processes | Update to divide pay cycles by paydays, ensure eligible payments flagged as QE | An employee with monthly pay: employer pays SG every month instead of every quarter |
| Cashflow Planning | Plan for more frequent outflows instead of large quarterly sums | Small business with 10 employees must send SG after each pay run rather than once per quarter |
| Software & Reporting Compliance | Ensure STP software supports new QE codes; process payments via SuperStream or alternatives | Update payroll system before 1 July so it can report the new code “Q” and handle SuperStream transfers |
Benefits & Challenges
Benefits:
- Reduces risks for employers missing SG deadlines and incurring charges.
- Helps employees receive super earlier and reduces lag in receipt of funds.
- Improved transparency and traceability per pay period.
Challenges:
- Administrative burden of more frequent processing, especially for smaller employers.
- Cash flow adjustments required.
- Software and system changes, especially where older payroll systems aren’t easily updated.
What Employees Should Know
- Employers must pay SG each payday, and funds must receive amounts within 7 business days.
- Paychecks should reflect how “qualifying earnings” are computed.
- Long-term, this reform improves when super is invested (reduces idle time), benefiting final balances.
Action Checklist for Employers
- Review and update payroll system or engage a provider that supports Payday Super.
- Identify all payment types that count as QE and make sure they are properly coded.
- Before 1 July 2026, download all SBSCH records and transition away safely. (ato.gov.au)
- Train staff in payroll and HR to understand changes in timing and reporting.
- Communicate with workers so they understand timing and expected fund receipt.
Payday Super is a fundamental change in how super contributions are handled—and understanding its components will help ensure compliance and smooth transition.