Compliance
Navigating Australia’s Upcoming Payday Super Reforms: What Employers Must Do
From 1 July 2026, the Payday Super reforms introduce sweeping changes to how qualifying earnings are defined and how super guarantee charges are calculated—this article guides employers through the essentials, with examples and compliance tips.
By NomadicTax Research Team • 5-8 min read • April 20, 2026
## What are the Payday Super Reforms?
The **Payday Super** reforms are part of two Acts: the *Treasury Laws Amendment (Payday Superannuation) Act 2025* and the *Superannuation Guarantee Charge Amendment Act 2025*. These reforms overhaul the superannuation guarantee (SG) framework, and **apply from 1 July 2026**. One major change concerns what counts as **qualifying earnings (QE)** and thus calculation of SG liabilities. ([ato.gov.au](https://www.ato.gov.au/law/view/document?LocID=%22COD%2FLCR2026D3%2FNAT%2FATO%2Fft7%22&PiT=99991231235958&utm_source=openai))
### Key changes employers need to know
- **Qualifying earnings definition**: The new rule clarifies what amounts must be included when calculating QE—for example, regular base salary plus allowances paid on QE days. ([ato.gov.au](https://www.ato.gov.au/law/view/document?LocID=%22COD%2FLCR2026D3%2FNAT%2FATO%2Fft7%22&PiT=99991231235958&utm_source=openai))
- **Transitional rules**: The law includes provisions to handle timing mismatches and overlapping obligations during the transition period from 1 July 2026. ([ato.gov.au](https://www.ato.gov.au/law/view/document?LocID=%22COD%2FLCR2026D3%2FNAT%2FATO%2Fft7%22&PiT=99991231235958&utm_source=openai))
- **SG charge calculation**: Employers must ensure super contributions and any shortfalls are correctly calculated when payments are made, per the updated guidance. ([ato.gov.au](https://www.ato.gov.au/law/view/document?LocID=%22COD%2FLCR2026D3%2FNAT%2FATO%2Fft7%22&PiT=99991231235958&utm_source=openai))
## Examples to illustrate the changes
| Scenario | Before reforms | After 1 July 2026 |
|---|---|---|
| An employee is paid weekly, including overtime and allowances | Only base rate may have been counted as qualifying earnings | All components defined under QE—including allowances paid on QE day—must be included in SG calculation |
| Oversight in transitional period | Some non-compliance may have been tolerated | Transitional rules apply, but record-keeping and documentation must be precise to avoid penalties |
## Actionable steps for employers
1. **Review your payroll and award-based contracts**: ensure all payments made on QE days are identified and included in QE.
2. Update systems and processes to calculate SG liability based on the expanded QE definition.
3. Track dates carefully: the reforms are **effective 1 July 2026**, with transitional rules before and after. ([ato.gov.au](https://www.ato.gov.au/law/view/document?LocID=%22COD%2FLCR2026D3%2FNAT%2FATO%2Fft7%22&PiT=99991231235958&utm_source=openai))
4. Seek guidance or obtain draft Law Companion Ruling LCR 2026/D3 from the ATO and rely on it in good faith where applicable. ([ato.gov.au](https://www.ato.gov.au/law/view/document?LocID=%22COD%2FLCR2026D3%2FNAT%2FATO%2Fft7%22&PiT=99991231235958&utm_source=openai))
## Potential Pitfalls to Watch Out For
- Incorrectly excluding allowances or benefits paid on QE days—this can lead to SG shortfalls and penalties.
- Failing to apply transitional rules during early period could result in legal uncertainty.
- Inadequate recordkeeping for incomes, payment dates, and beneficiary data, especially if you are running trusts or multiple payroll frequencies.
## Why it matters
Employers who comply will avoid costly assessments, interest, or penalties, ensure employees’ super entitlements are properly honoured, and align with ATO’s heightened supervision. For employees, it means more transparent and accurate super build-ups.
By staying informed and adapting systems ahead of 1 July 2026, businesses can smoothly transition through these reforms while maintaining compliance and protecting employees' retirement savings.