What’s changing under Payday Super?
- Pay cycle vs super payment timing: Super contributions must now be made each payday, not quarterly. Employers must calculate contributions based on Qualifying Earnings (QE). (community.ato.gov.au)
- Payments must reach super funds within 7 business days of payday, unless exceptions apply (for example, for new employees or certain transitional arrangements). (softwaredevelopers.ato.gov.au)
- The Small Business Superannuation Clearing House (SBSCH) will permanently close on 1 July 2026. Employers currently using SBSCH must switch to another payment method and download records before closure. (ato.gov.au)
Key definitions and reporting updates
- Qualifying Earnings (QE): Includes ordinary time earnings (OTE) plus certain payments to contractors engaged primarily for their labour. Understand what is included in QE under your payroll. (community.ato.gov.au)
- Super guarantee charge and late payments: Failing to meet new timings can lead to SG shortfall and penalties. Draft rulings (e.g. LCR 2026/D3) explain employer liability under the updated SG legislation. (ato.gov.au)
- Reporting via Single Touch Payroll (STP): Extra fields are required—employers must report year-to-date QE and super liability per employee each payday. (community.ato.gov.au)
Action checklist for employers
| Task | When to complete | Why it matters |
|---|---|---|
| Audit payroll software | ASAP (before July 2026 pay cycle) | Needs to calculate QE, support frequent payments, reporting changes. |
| Identify alternate payment method to SBSCH | Before 30 June 2026 | SBSCH closes permanently; avoid late payments and record loss. |
| Train payroll and HR teams | Before implementation | Ensure correct calculation, avoid mis-classification of payments. |
| Communicate with employees | Mid-2026 | Employees need to know timing and process, especially contractors. |
| Review cashflow & payment schedules | Ongoing from mid-2026 | More frequent payments may impact cashflow. |
Common pitfalls and how to avoid them
- Misclassifying ‘ordinary time earnings’ or contractor payments: Leads to underpayment of contributions
- Not allowing lead time for payment clearance: Super funds must receive payments within 7 days—payments submitted too late still contribute to SG charge risk
- Delayed software updates: STP reporting demands new codes; failure to update may cause missed or incorrect liability reporting
- Leaving SBSCH records behind: Historical records are crucial; must be downloaded before 30 June 2026. (ato.gov.au)
Example timeline for small business
April-June 2026: last quarter under old system; calculate contributions for quarter due by 28 July 2026. Beginning 1 July, begin Payday Super obligations. 28 July 2026 also marks due date for quarterly contributions. After this date, super due per payday and processed through updated methods. (community.ato.gov.au)
Looking ahead
- Employers should keep informed of forthcoming Law Companion Rulings (LCRs) like LCR 2026/D1, D2, D3 and D4 which provide detailed guidance. (ato.gov.au)
- Engage early with your superannuation fund to ensure funds can accept contributions per new rules and handle the reporting. Funds will need to allocate or return contributions in 3 business days. (softwaredevelopers.ato.gov.au)
Payday Super represents a major compliance shift: updated frequency, tighter turnarounds, new definitions. With proper planning, employers can avoid penalties and smoother transitions.