What is Payday Super?
Payday Super is a major reform requiring that employers pay super guarantee (SG) contributions together with salary and wages from 1 July 2026. (ato.gov.au) These payments must reach the employee’s super fund within 7 calendar days of payday. Late payments will trigger the updated SG charge. (ato.gov.au)
Super on Government-Funded Parental Leave
From the same date—1 July 2026—government-funded parental leave payments will include super contributions at the legislated SG rate (currently 12%) and count toward an individual’s concessional contributions cap. These will be treated like regular super contributions and taxed at 15% within the fund. (ato.gov.au)
For Employers: Key Compliance Requirements
- Align payroll cycles so SG contributions are made every payday, not quarterly or later.
- Ensure SG contributions funds are delivered within 7 days post-payday. Late payments may attract the SG charge, though some administrative uplift factors are being designed. (ato.gov.au)
- Begin reporting both Ordinary Time Earnings (OTE) and Total Super Liability fields through Single Touch Payroll (STP). SuperStream standards will also be revised; payments may need to flow via the New Payments Platform (NPP) for speed. (ato.gov.au)
Examples
Small Retail Business (Sue’s Boutique): Sue pays her staff weekly. Under the new rules, she must send super contributions within 7 calendar days of each pay cycle when the wages hit the employees’ bank or pay account. Delayed payments risk the updated SG charge.
Parent returning to work (Alexandra): Receives government-funded parental leave; from July, she gets super contributions on that leave. Those contributions will eat into her concessional cap; she must monitor total super contributions to avoid exceeding the limit.
Action Plan for Employers
- Review payroll and superannuation process flow now—identify who handles SG payments, timing, and systems.
- Update software or payroll provider contracts to ensure STP reporting captures OTE and liability fields as required.
- Inform HR/payroll teams about the 7-day payment window and plan for compliance checks.
- Plan communication to employees, especially those on parental leave, to explain how super will now apply to leave payments.
Risks of Non-Compliance
- Potential for updated SG charges with penalties.
- Increased audit exposure by ATO, particularly given sharper data matching and compliance efforts.
- Employee dissatisfaction or disputes if super isn’t paid properly or on time.
Bottom line: Payday Super and the new parental leave super contributions reshape employer responsibilities from 1 July 2026. Don’t wait—revise processes, upgrade systems, and train staff now to avoid non-compliance issues later.