Overview of Payday Super
The Payday Superannuation reform, enacted under the Treasury Laws Amendment (Payday Superannuation) Act 2025, requires employers to pay their employees’ superannuation at the same time as salary and wages starting 1 July 2026. This replaces older lagged timing, ensuring contributions are made more promptly. (pwc.com.au)
The reform includes changes to:
- Qualifying earnings — what pay counts toward super guarantee calculations.
- Contribution timing — super must be allocated within three business days (for regulated funds), with special rules for SMSFs. (pwc.com.au)
- Reporting and regulations — related Law Companion Rulings and regulatory changes have been introduced, including updates to the SG Administration Regulations and SIS Regulations. (pwc.com.au)
What Employers Must Do Now
- Review payroll policies & systems:
- Ensure systems can calculate super contributions each pay run based on “qualifying earnings.”
- Update payroll software to allocate super payments within deadlines.
- Train HR & payroll teams on the new definitions and timing rules.
- Identify SMSFs vs regulated funds, since different allocation deadlines apply. SMSFs retain 28-day rule; others get 3 business days. (pwc.com.au)
- Check transitional issues:
- Avoid exceeding concessional contributions caps during transition (2026-27), particularly due to employer contributions for the last quarter of FY 2025-26 potentially falling in the new financial year. Technical amendments are in place to prevent this cap breach. (pwc.com.au)
- Monitor guidance and draft rulings — ATO has released draft Law Companion Rulings for public comment (due by 1 May 2026) explaining key elements. (pwc.com.au)
Compliance Risks & Best Practices
| Risk | Consequence | Mitigation |
|---|---|---|
| Late super payments | Penalties, compliance notices | Automate payroll; schedule super payments alongside payroll runs |
| Mis-classification of wages | Underpaid super guarantee | Audit payroll components to align with “qualifying earnings” definitions |
| Failing to report correctly | Regulatory scrutiny | Get software updates; test reporting; consider external payroll audit |
Practical Example
Acme Pty Ltd pays monthly salaries. Under Payday Super:
- On Payday (say 25th of each month), salary + super must be paid so the funds reach the employees’ super fund by the end of that pay period (or within 3 business days if not SMSF).
- If Acme’s salary pay for June (salary + super) is processed late (say in early July), that super amount is treated under FY 2026-27, which may push some employees over the concessional cap under new timing rules.
Employer Action Plan
- Audit current software and bank/payment processes.
- Engage your software provider to ensure payroll and super functionality align with new law.
- Communicate changes with employees so they understand when super will be paid.
- Consult with your tax adviser about whether actions before 30 June 2026 could affect concessional cap exposure.
By getting systems and policies in order before July 2026, employers can ensure smoother transition, minimise risk, and protect employees’ superannuation entitlements.