The Federal Government’s payday superannuation reforms officially passed Parliament on 4 November 2025, and the clock is now ticking. From 1 July 2026, all employers, including not-for-profits, small businesses and larger enterprises, will be required to pay superannuation guarantee (SG) contributions at the same time as salary and wages.
This reform represents one of the most significant changes to employer payroll obligations in more than a decade. The shift away from quarterly SG payments will require employers to review and adjust payroll systems, cash flow planning, payment cycles and internal approval processes. With a limited transition period remaining, early preparation is essential.
Under the new rules, SG contributions must generally reach an employee’s super fund within 7 business days of each payday. A different timing rule applies for new employees: the first super contribution must be made within 20 business days of the first wage payment in circumstances where the employer is contributing to a fund for that employee for the first time.
To support these changes, Single Touch Payroll (STP) reporting will expand to include additional superannuation data, SuperStream standards will be tightened to enable faster and more accurate payments, and the SmallBusiness Superannuation Clearing House(SBSCH) will be closed to new users from 1 October 2025 before being retired on 1 July 2026.
Stronger penalties for late payments
The ATO has strengthened the Superannuation Guarantee Charge (SGC) to emphasise the importance of timely payments under the payday super regime. In simple terms, the financial consequences of paying super late will be more substantial than they are today.
If contributions do not reach an employee’s fund within the required timeframe, employers may be liable for:
- The unpaid super amount
- Interest, to reflect lost investment earnings for the employee
- Administrative charges imposed by the ATO
- Additional penalties for ignoring the choice of fund requirements or failing to act on an ATO notice
Although the SGC will now be tax-deductible, the overall cost of late payment remains significant, and the administrative burden of rectifying non-compliance may be complex. The most straightforward and cost effective approach is to ensure contributions are paid correctly and on time.
Why this reform matters for employers
The move to payday super is designed to improve retirement outcomes for Australian workers by ensuring contributions are made promptly and consistently. It also reflects a broader shift toward real-time payroll reporting, faster digital payments and improved transparency across the superannuation system.
For employers, particularly those managing grant funding cycles, fluctuating revenue or complex workforce arrangements, the reforms mean taking a close look at payroll processes, budgeting, and internal controls well before the 1 July 2026 deadline.
What employers should do now
With the start date approaching quickly, employers should take action now to prepare for the new requirements. Key steps could include:
- Reviewing payroll software to confirm it can process superannuation on payday
- Planning for cash-flow impacts associated with more frequent super payments
- Preparing to transition away from the SBSCH if currently in use
- Auditing existing SG calculations to ensure accuracy and identify any risks
- Assessing whether to adopt payday super early to smooth the transition
By beginning this work now, employers can avoid unnecessary stress in June and ensure full compliance before the new system commences.
Work with Next Dimension Accounting to prepare
The transition to payday super will affect every employer. Next Dimension Accounting can guide your organisation through the new requirements, assist in reviewing payroll processes and cash flow implications, and ensure you are fully prepared well before 1 July 2026. The team will be in touch with existing clients, and we welcome new clients who may require assistance with Payday Super and other accounting requirements.
