What is Payday Super?
From 1 July 2026, major reforms under the new Payday Super rules will require employers to pay super guarantee (SG) contributions at the same time as salary and wages as well as use a new earnings measure called Qualifying Earnings (QE). (softwaredevelopers.ato.gov.au)
Key Changes Employers Should Know
| Item | Current Rule | New Rule from 1 July 2026 |
|---|---|---|
| Super payments frequency | Quarterly | Each pay period (payday) (softwaredevelopers.ato.gov.au) |
| Qualifying Earnings includes | Ordinary Time Earnings (OTE) | OTE + additional payments contractors for labour, other remuneration items as defined in QE (softwaredevelopers.ato.gov.au) |
| Timeframe for super funds to receive payments | Varies (often longer than weekly delays) | Within 7 business days after payday (with limited exceptions) (softwaredevelopers.ato.gov.au) |
| Closure of SBSCH | Small Business Super Clearing House used for quarterly payments | Permanently closes on 1 July 2026; employers must switch to an alternative payment method (ato.gov.au) |
Why These Changes? Implications & Impact
- Designed to reduce gaps in super contributions and late payments.
- Super funds will need to improve allocation processes; employers must ensure payroll and STP systems are updated.
- Enhanced reporting through Single Touch Payroll (STP) will mandate new labels: QE and SG liability. (softwaredevelopers.ato.gov.au)
- For late switchovers—e.g., those still using SBSCH past closure—there may be compliance risks. The ATO will focus compliance action more on those who do nothing. (softwaredevelopers.ato.gov.au)
Practical Examples & Steps to Prepare
Example:
An employer paying weekly with a salary of AUD 1,500 includes an additional contractor payment of AUD 200 for labour. Under QE, both figures must be included in the base on which SG (12%) is calculated.
Action Plan for Employers:
- Review payroll software for compatibility with new STP reporting codes (e.g. QE label).
- Map pay codes to identify which payments count as QE (apart from OTE).
- Negotiate alternative payment methods to SBSCH; move to commercial clearing house or direct payroll fund payments. Download SBSCH records before 30 June 2026. (ato.gov.au)
- Cashflow planning—ensure super payments can be made within 7 business days after every payday.
What About Transition & Compliance?
- To ease compliance, draft rulings (e.g. LCR 2026/D3) have been released outlining how SG charge is calculated under the reforms. (ato.gov.au)
- The ATO will consider good faith efforts in 2026–27 when assessing compliance action. Employers trying to comply won’t be first in line for penalties. (softwaredevelopers.ato.gov.au)
Bottom line: if you are an employer in Australia, 1 July 2026 marks a major shift. Ensure systems, processes, and people are ready for Payday Super to avoid surprises and stay compliant.