NEW Payday Superannuation – What’s It All About?
Updated on 7 November 2025
‘Payday superannuation’ will change the way superannuation guarantee is administered to employees.
Here’s what it’s all about…
What is payday superannuation?
On 4 November 2025, the following legislation officially passed both houses of parliament:
- The Treasury Laws Amendment (Payday Superannuation) Bill 2025, and
- The Superannuation Guarantee Charge Amendment Bill 2025.
This legislation will give effect to a major reform known as Payday Super, which represents a significant shift in how employers handle superannuation payments.
From 1 July 2026, employers will be obligated to pay Superannuation Guarantee (SG) on behalf of their employees at the same time as their salary and/or wages.
Currently, most businesses make superannuation contributions quarterly. But under the new system, these payments will move to a ‘payday’ model, aligning with each payroll cycle.
The Government announced the proposal in the 2023-24 Federal Budget in hopes it will reduce the estimated $5.2 billion gap between what is owed to employees and what has been paid.
How will payday superannuation work?
The due date for SG payments will be seven days from when you make an ordinary times earning (OTE) payment. That is, employers have seven days from an employee’s payday for their SG to be received by their superannuation fund.
The only exceptions are for new employees whose due date will be after their first two weeks of employment. It is also for small and irregular payments that occur outside the employee’s ordinary pay cycle.
For business owners, this change will require some adjustments to payroll processes. Instead of scheduling superannuation payments quarterly, you’ll need to ensure your system and cash flow are set up for more frequent payments – usually weekly, fortnightly, or monthly, depending on how often you pay staff.
The good news is that most modern payroll software is already equipped to handle this. The shift to payday superannuation is also expected to streamline compliance reporting, since superannuation and tax data will be reported more closely together through Single Touch Payroll (STP).
The impact for some employers however will not be the compliance cost, but the cashflow. Employers will not be holding their payroll until 28 days after the end of the quarter, but instead paying this amount out on the employee’s payday.
The ATO are also phasing out their Small Business Superannuation Clearing House (SBSCH), as part of the Government’s broader move to modernise superannuation processing and reporting, a shift that directly supports the introduction of Payday Super.
How can employers prepare?
As Payday Superannuation legislation has now passed parliament, you can start preparing early for it’s implementation on 1 July 2026..
Here’s how you can get ahead:
- Review your payroll processes: Make sure your system can handle superannuation payments each pay cycle (more on this below).
- Check your cash flow: Regular superannuation payments will mean more frequent outgoing payments, so plan ahead. Aintree Group can assist with cash flow forecasting so you can see how the real numbers stack up against these new potential obligations.
- Communicate with your team: Let your employees know how the change will work.
- Talk to your bookkeeper or accountant: They can help ensure your business is ready for the transition and compliant with the upcoming changes.
Xero & Payday Super
If you use Xero Payroll, you’re already in a strong position. Xero has built-in ATO-integrated superannuation payment capabilities, meaning you can automate superannuation contributions in line with each pay run.
Xero’s ongoing updates and ATO integration will make it even easier for small businesses to stay compliant and efficient, without adding to your admin workload.
You can speak to our Management Accounting team at Aintree Group if you need further training or guidance on using Xero for your payroll and superannuation obligations.
What happens if you pay SG late?
The penalties for underpaying or not paying SG are deliberately harsh and this approach will continue under payday super.
Currently, a Superannuation Guarantee Charge (SGC) applies to late SG payments. And, unlike normal superannuation guarantee contributions, SGC amounts are not deductible to the employer, even when you satisfy the liability.
Under payday super, there is compensation for employees if there are delays in receiving SG amounts. Larger penalties will apply to employers that repeatedly fail to comply with their obligations.
If you make a payment late, the SGC will consist of:
| Outstanding SG shortfall | Calculated based on OTE, rather than total salaries and wages as it is currently. |
| Notional earnings | Daily interest on the shortfall amount from the day after the due date, calculated at the general interest charge rate on a compounding basis. |
| Administrative uplift | An additional charge levied to reflect the cost of enforcement and calculated as an uplift of the SG shortfall component of up to 60%, subject to reduction where employers voluntarily disclose their failure to comply. |
| General interest charge | Interest of 10% will accrue on any outstanding SG shortfall and notional earnings amounts, as well as any outstanding administrative uplift penalty. |
| SG charge penalty | Additional penalties of up to 50% of the outstanding unpaid SG charge, that apply where amounts are not paid in full within 28 days of the notice of assessment. |
As you can see, late SG payments can spiral out of control quickly.
This will be a particular issue for employers that:
- pay employees less than their entitlements over time, or
- have misclassified employees as contractors and have an outstanding SG obligation.
The new SGC will be tax deductible. This excludes penalties and interest that accrue if the employer doesn’t pay the SG charge amount within 28 days).
At Aintree Group, we work closely with business owners to stay ahead of changes like payday super. Our team can help you review your payroll systems, assess cash flow implications, and ensure we manage your superannuation obligations accurately and efficiently.
If you need guidance on how this change may affect your business or assistance getting your systems ready, please reach out to our Accounting team.
This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your accountant.
