Compliance
How Australia’s Payday Super Reform Changes Super Contributions for Employers and Employees
From 1 July 2026 employers must pay super guarantee on payday and funds must be received by super funds within 7 business days—the Payday Super reforms change both timing and calculation.
By NomadicTax Research Team • 5-8 min read • September 10, 2026
## What is Payday Super?
Payday Super is a major change in Australia’s superannuation system, effective from **1 July 2026**. Under the reform, employers must:
- Calculate superannuation at **12% of an employee’s qualifying earnings**, which expands the definition beyond ordinary time earnings to include commissions, salary sacrifice contributions, and payments to workers treated as employees under extended definitions. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
- Make super payments **each payday** (whether weekly, fortnightly, or monthly), replacing the old quarterly system. These payments must be **received by the super fund within 7 business days** of payday, unless extended timelines apply. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
## What Employers Must Do Now
To comply under Payday Super, employers need to act on several fronts:
- **Update payroll systems and digital service provider (DSP) software** to report qualifying earnings and super liability every payday via Single Touch Payroll (STP) reporting. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001qD2iH/payday-super-has-started-heres-what-employers-need-to-know-and-do?utm_source=openai))
- **Close or phase out use of the Small Business Superannuation Clearing House (SBSCH)**, which permanently shut on 1 July 2026. Employers still registered must switch to alternative SuperStream-compliant payment methods. ([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-to-pay-super/small-business-superannuation-clearing-house?=redirected_sbsch&utm_source=openai))
- Track super payments carefully, especially during **transition months** (notably July 2026) when both quarterly and payday super obligations overlap. Payments received between 1–28 July 2026 will be allocated to outstanding quarterly amounts first; payments from 29 July 2026 must be allocated only to payday super liability. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001qD2iH/payday-super-has-started-heres-what-employers-need-to-know-and-do?utm_source=openai))
## Impact on Employees and What You Should Know
Employees will see some changes too:
- Frequency of creating super payments will increase—funds should arrive every payday cycle. This improves **visibility and cash flow into super funds**.
- All types of payments that count as qualifying earnings must be included, making calculations more comprehensive.
- If employers miss deadlines, they risk liability under the Superannuation Guarantee Charge (SGC), which includes possible penalties.
## Examples
- **Weekly worker**: Sarah is paid every Friday. Under Payday Super, her employer must pay her super on each Friday, and it must arrive in her super fund by the following Friday (7 business days).
- **Commission-based employee**: James earns commissions plus salary. Under new rules, the commission payments now form part of qualifying earnings, increasing his base for super contributions.
- **Small business using SBSCH**: A business using SBSCH closed service must now have integrated a new system by July 1, 2026. If not, late payments may trigger the super guarantee charge.
## Actionable Takeaways
- Employers should **review payroll software and DSP integrations** to ensure they can handle frequent payments and accurate qualifying earnings reporting.
- Conduct training with payroll and finance teams on defining qualifying earnings properly.
- Employees should monitor their super funds to ensure contributions arrive as expected and review payslips for qualifying earnings inclusion.
- For small businesses, plan migration from SBSCH well before the deadline and update processes to meet the new payment timelines.
## Why It Matters
- Ensures fairness and reduces delays in super contributions reaching funds.
- Enhances employer accountability and data transparency around super guarantees.
- Improves employee security in accessing their earned entitlements, especially those with variable pay or commission structures.
**Category**: Compliance
**TaxHome**: Australia
**Author**: NomadicTax Research Team
**ReadTime**: 5-8 min
**Published**: true