Compliance
Understanding Payday Super: What Employers Must Do From 1 July 2026
Australia’s superannuation regime is changing—employers will need to pay super on each payday and include qualifying earnings. Here's how to prepare.
By NomadicTax Research Team • 5-8 min read • July 13, 2026
## 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](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
### 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](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai)) |
| Qualifying Earnings includes | Ordinary Time Earnings (OTE) | OTE + additional payments contractors for labour, other remuneration items as defined in QE ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai)) |
| 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](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai)) |
| 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](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-to-pay-super/small-business-superannuation-clearing-house?=redirected_sbsch&utm_source=openai)) |
## 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](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
- 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](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
## 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:
1. **Review payroll software** for compatibility with new STP reporting codes (e.g. QE label).
2. **Map pay codes** to identify which payments count as QE (apart from OTE).
3. **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](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-to-pay-super/small-business-superannuation-clearing-house?=redirected_sbsch&utm_source=openai))
4. **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](https://www.ato.gov.au/law/view/document?LocID=%22COD%2FLCR2026D3%2FNAT%2FATO%2Fft7%22&PiT=99991231235958&utm_source=openai))
- 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](https://softwaredevelopers.ato.gov.au/DARG20260421?utm_source=openai))
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**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.