Compliance
Navigating the New Payday Super Regime: What Employers Need to Know
From 1 July 2026, super contributions must be made each payday under the new Payday Super system. Here’s how employers can prepare and ensure compliance.
By NomadicTax Research Team • 6-7 min read • August 21, 2026
## What is Payday Super?
Payday Super is a significant change in Australia’s superannuation rules. Beginning 1 July 2026, employers must pay super guarantee (SG) contributions **on payday**, not quarterly, and the contributions must reach employees’ funds within **7 business days** of payday. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
Here’s what’s new:
- Super contributions calculated at **12%** on an employee’s *qualifying earnings* (QE) — which now includes ordinary time earnings (OTE), salary sacrifice, commissions, and certain payments made to contract workers. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
- Employers have to pay super **each payday** and ensure funds are received within 7 business days unless certain extended periods apply (e.g., new employees or fund changes). ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
- The existing Small Business Superannuation Clearing House (SBSCH) will be permanently **retired** from 1 July 2026. Businesses using SBSCH must transition to other payment methods. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
- Single Touch Payroll (STP) reporting must include year-to-date QE and super liability each payday. Reporting changes may require software updates. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
## First Year Compliance Approach
During the first year of implementation (1 July 2026 – 30 June 2027), the ATO will show flexibility:
- Employers making genuine efforts to comply won’t immediately become compliance targets. Mistakes should be corrected promptly and documented. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001qD2iHIAS/payday-super-has-started-heres-what-employers-need-to-know-and-do?utm_source=openai))
- If contributions are made to the wrong fund or are rejected, fix errors and resubmit without delay. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001qD2iHIAS/payday-super-has-started-heres-what-employers-need-to-know-and-do?utm_source=openai))
## Action Steps for Employers
| Task | Why it Matters |
|---|---|
| Audit payroll systems for inclusion of all components in *qualifying earnings* | Ensures super is calculated correctly under new definition |
| Talk to your payroll provider or software vendor | To verify software is updated for STP changes and compliant with Payday Super |
| Identify alternative SuperStream-compliant payment methods if using SBSCH | SBSCH closes 30 June 2026; you’ll need a replacement process in place |
| Review internal processes for error handling and timely payments | To avoid SG Charge (with penalties) and ensure funds are allocated correctly |
## Example
**Scenario**: ABC Co pays staff fortnightly. Emma earns $3,000 in OTE and $500 in commissions on payday. Under Payday Super, both are part of *qualifying earnings*, so super at 12% applies to $3,500. ABC Co must pay the super into Emma’s fund and make sure the fund receives it within 7 business days.
If there’s a rejected payment due to incorrect fund details, ABC Co should correct it immediately, resubmit before the due date, and document the process to benefit from the first-year compliance approach.
## Key Risks & Penalties
- Failing to meet the 7 business day requirement or using incorrect qualifying earnings may lead to an **SG Charge**. Under the new regulations, this includes interest and potential penalties. ([ato.gov.au](https://www.ato.gov.au/law/view/document?LocID=%22COD%2FLCR2026D3%2FNAT%2FATO%2Fft7%22&PiT=99991231235958&utm_source=openai))
- Relying on SBSCH after closure will likely result in payments being rejected, delayed, or returned. ([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?%3Fs%2Fpage%2F32%2Fpage%2F2%2F=&s=&s%2Fpage%2F32%2F=&s%2Fpage%2F32%2Fpage%2F5%2F=&s%2Fpage%2F32%2Fpage%2F622%2F=&s%2Fpage%2F9%2Fpage%2F47%2F=&s%2Fpage%2F9%2Fpage%2F582%2F=&utm_source=openai))
## Summary for Employers
Payday Super means you need to be super-ready by 1 July 2026. “Super” won’t only mean contributions, but timing, reporting, and systems. Review your payroll setup now, shift to compliant service providers, and aim for accuracy from day one. Your efforts in the first year will be viewed kindly by the ATO—errors fixed early matter.
Payday Super is a Compliance change with very high impact.