What is Payday Super?
From 1 July 2026, the Australian superannuation system undergoes a major change through the Payday Super reforms. Under this new regime, employers must pay super guarantee (SG) contributions at the same time employees receive salary or wages, rather than on a quarterly basis. Delays expose employers to the SG charge, calculated per qualifying earnings (QE). (softwaredevelopers.ato.gov.au)
Key Components of Payday Super
| Component | What It Means | Importance |
|---|---|---|
| Qualifying Earnings (QE) | QE combines ordinary time earnings (OTE) and a broader set of payments and remuneration. Employers must calculate SG as 12% of QE. (softwaredevelopers.ato.gov.au) | Ensures more types of pay contribute to super — doesn’t leave gaps in SG contributions. |
| Pay on Payday; Funds Received within 7 Days | Employers must pay contributions on payday so that the super fund receives them within 7 business days (unless an extended timeframe applies). (softwaredevelopers.ato.gov.au) | Tight timelines — delays can trigger the SG charge. |
| Closure of the Small Business Superannuation Clearing House (SBSCH) | SBSCH will be shut permanently from 1 July 2026. Existing users must transition to alternative payment arrangements and download transaction history beforehand. (ato.gov.au) | Small businesses need to identify new tools for SG payments and ensure records are captured. |
| System Changes & Reporting Updates | Payroll systems need to send QE data via new codes (such as code Q in STP), validate funds via the Fund Validation Service, and use the New Payments Platform for more real-time payment options. (softwaredevelopers.ato.gov.au) | Significant IT/operational changes — DSPs, employers, and super funds need readiness. |
Examples: Putting Payday Super Into Practice
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Scenario: Traditional Payroll with Overtime & Bonuses Sarah works a base salary plus overtime. Under Payday Super, her employer must include overtime, bonuses, and any other eligible payments in QE, calculate SG at 12%, pay it at her next pay run, and ensure the super fund gets the money within 7 days.
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Transition Period (QE days 1 July 2026 – 30 June 2028) Josh changes his super fund after being employed. During the transitional phase, there are rules to avoid overlapping obligations: his employer must consider previous QE days in wait periods before treating contributions as on-time. (ato.gov.au)
What Employers Should Do Now
- Review payroll processes to ensure QE data can be captured and reported.
- Update or procure systems that support STP with code Q, Fund Validation Service responses, and real-time payment flows.
- Identify alternative payment methods, especially if currently using the SBSCH. Download all records before 1 July 2026. (ato.gov.au)
- Train staff or agents on timelines and obligations to avoid unintended SG charge liabilities.
What Employees Should Be Aware Of
- Understand what “qualifying earnings” include under the new law, including any formerly excluded pay elements.
- Verify that super contributions are being paid with their wages and arrive at their super fund within 7 business days.
- Check that their employer’s SG contributions are being calculated appropriately; mistakes can be reported to the ATO.
Conclusion
The Payday Super reforms raise the bar for employer compliance and protect employees by tightening when SG contributions must be made. The window to adjust is tight — mid-2026 is here, so both businesses and employees need to act now.