Introduction
Australia’s superannuation landscape is changing permanently. The Payday Super reforms, effective 1 July 2026, require employers to pay super every payday instead of quarterly. This is a high-impact change with big compliance implications.
What’s Changing
- Employers must pay super based on qualifying earnings — this includes ordinary time earnings and payments to contractors engaged primarily for labour. (community.ato.gov.au)
- Super contributions must reach employees’ funds within 7 business days after each payday. (community.ato.gov.au)
- Quarterly obligations via the Small Business Superannuation Clearing House (SBSCH) will end; SBSCH closes permanently from 1 July 2026. (community.ato.gov.au)
- Reporting via Single Touch Payroll (STP) will need to include employees’ year-to-date qualifying earnings and super liability per payday. (community.ato.gov.au)
Actions for Employers
- Review payroll systems — ensure they can identify qualifying earnings, process super contributions per-payday, and transmit required data via STP.
- Cash flow planning — moving to higher frequency payments may require stronger liquidity planning.
- Communicate with staff and contractors — especially about what counts as qualifying earnings to avoid classification errors.
- Close SBSCH account if using it; download all transaction histories before the deadline. (ato.gov.au)
- Update service level arrangements with payroll providers or agents to handle new timelines and reporting obligations.
Example Scenario
Sarah is a small business owner paying her full-time employees every fortnight, and also engages contractors for cleaning work. Under the new laws:
- Her super guarantee obligations for the fortnight must be calculated immediately after each payday, including certain contractor payments.
- She must send the contributions to employees’ super funds within 7 business days after payday, or risk liabilities.
- Her payroll/stp submission must show qualifying earnings and super liability for that pay period.
If Sarah misses the super payment deadline, she could face super guarantee charge and penalties.
Pitfalls to Avoid
- Misclassifying earnings: paying bonuses, allowances or contractor fees that may or may not count as qualifying earnings.
- Failing to net out the timeline: payments received late may incur charges.
- Not updating payroll software in time, leading to incorrect STP reporting.
Conclusion
This reform represents a substantial compliance shift. For employers, preparation begins now. Audit your earnings classifications, systems, and cash flow. Getting ahead means avoiding penalties and ensuring smooth transition.