Big Payroll Changes Now Live: Is Your Business Compliant?

The new financial year has arrived, bringing two significant payroll changes that now apply to Australian employers.

Both changes took effect from 1 July 2026 and are expected to impact payroll processes, compliance obligations and business cash flow.

Two key developments are:

The introduction of payday super.
A 4.75% increase to award wages and the national minimum wage.

If you haven’t already reviewed your payroll systems and employee pay rates, now is the time to do so.

To explore the larger framework of changes beginning 1 July, read our recent blog post here.

Payday Super Is Here

As of 1 July 2026, superannuation contributions must now be paid at the same time as wages, and received by the employees nominated superannuation fund within 7 business days.

“There is one exception. For new employees, the first super contribution must be received by the employee’s nominated super fund within 20 business days of their first payday.”

The Super Guarantee rate remains 12%, however Qualifying Earnings (QE) are now used as the base to calculate both the SG amount and the Super Guarantee Charge (SGC). Employers should ensure their payroll systems are correctly calculating superannuation obligations.

Why this matters?

Payroll compliance is becoming increasingly important. Reporting systems are improving, such as Single Touch Payroll (STP) and SuperStream reporting. As a result, regulatory bodies such as the ATO and Fair Work Ombudsman have greater visibility over wages, superannuation and employee entitlements. Regular reviews can help identify issues before they become expensive problems.

Late super payments may result in Super Guarantee Charge liabilities, which are generally not tax deductible and may attract additional penalties.

Read more on how data, automation and transparency are reshaping tax compliance here.

Practical Tips For Employers

Administrative processes and systems should be regularly reviewed and refreshed as required to meet compliance requirements.

With these changes now in effect, employers should:

Confirm their payroll software supports payday super requirements.
Speak with their payroll provider to ensure systems are operating correctly.
Review cash flow forecasts, as superannuation is now a recurring per-pay obligation rather than a quarterly expense.
Check onboarding procedures to ensure new employee super fund details are collected and processed efficiently.
Review payroll workflows to minimise the risk of missed or late payments.

Award and Minimum Wage Rates Have Increased by 4.75%

The Fair Work Commission’s 4.75% increase to modern award minimum wages and the national minimum wage took effect on 1 July 2026.

As a result, the national minimum wage is now $26.44 per hour, or $1,004.90 per week for a full-time employee.

For employees covered by an award, the Commission has announced a 4.75% increase to minimum wages, provided that:

The lowest rate in any award that applies to ongoing employment must be at least $1004.90 per week or $26.44 per hour, and
Any entry-level rate that applies to the first 6 months (or less) of employment must be at least $978.10 per week or $25.74 per hour.

On top of this, some employees at the C13 classification level may receive increases above 4.75% as part of the Fair Work Commission’s phased removal of the lowest award classification.

Read more about these changes in our blog post here.

What Employers Should Be Doing

Businesses should:

Audit employee pay rates against the relevant modern award.
Review annualised salary arrangements to confirm they continue to absorb all applicable award entitlements.
Check enterprise agreements to ensure pay rates remain above updated award minimums.
Review the latest Fair Work Ombudsman Pay Guide for their industry.
Update payroll systems and budgets to reflect the new wage rates.

Beyond Compliance: Using Payroll as a Strategic Tool

While the recent payroll changes focus on compliance, they also provide an opportunity for business owners to review whether their payroll processes are supporting broader business goals.

Payroll is often viewed as an administrative function, but when managed strategically it can help improve cash flow, support employee retention and create tax-effective outcomes.

Some areas worth reviewing include:

Remuneration Structure

The way employee remuneration is structured can have a significant impact on both business costs and employee satisfaction.

Options such as salary sacrifice arrangements, novated leases and carefully structured bonus programs may provide benefits for both employers and employees when implemented correctly.

Cash Flow Management

With superannuation now paid more frequently under payday super, businesses should consider whether their current payroll cycle remains appropriate.

Reviewing weekly, fortnightly or monthly pay cycles, planning for annual leave liabilities and forecasting future payroll costs can help reduce pressure on cash flow throughout the year.

Superannuation Planning

Superannuation is no longer simply a compliance obligation.

Additional employer contributions can be used as a staff retention tool, while business owners who are employees of their own business may benefit from strategic concessional contribution planning and tax deductions.

Growth Planning

As businesses expand, payroll obligations become increasingly complex.

Employers approaching payroll tax thresholds, expanding into new states or considering whether to outsource payroll should ensure they understand the compliance and financial implications before making decisions.

A proactive payroll review can often identify opportunities to improve efficiency, reduce risk
and better align payroll processes with broader business objectives.

Key Takeaway

The payroll changes introduced from 1 July 2026 are more than just compliance updates, influencing cash flow and working capital considerations.

From remuneration structures and superannuation planning to payroll tax management and payroll system efficiency, a strategic approach can help reduce risk, improve employee retention and support sustainable growth.

Businesses should take the time to review their payroll systems, employee pay rates, cash flow forecasts and overall payroll strategy to ensure they remain compliant and financially prepared.