Payday Super is Coming: Here's What You Need to Know

A Fundamental Shift in Superannuation Payments is Coming – Is Your Business Ready?

From 1 July 2026, Australia's superannuation landscape is undergoing its most significant change in decades. If your business employs anyone, be it full-time staff, casuals, or even yourself as a director—these new "Payday Super" rules will directly impact your operations.

What's Changing? The End of Quarterly Super Payments

Currently, many businesses enjoy the flexibility of paying superannuation quarterly, up to three months after the end of each quarter. However, the new legislation, passed by Parliament in November 2025, mandates a far tighter deadline: superannuation contributions will be due within seven business days of each pay run.

This isn't a change any business owner asked for, and we understand the challenges it presents for managing cash flow. However, it's now law, and our focus must shift to proactive preparation. The government views this as a vital worker protection measure, aiming to reduce the billions in unpaid super that currently sit in employer bank accounts. From your perspective, it demands a fundamental shift in how you manage payroll and cash flow.

You can find more detailed resources and information on these changes directly from the ATO here: Payday Super Resources from the ATO

How This Impacts Your Business

The "Payday Super" rules mean the generous quarterly buffer you've relied on for years to manage cash flow will be gone.

• Payment Frequency: If you pay employees fortnightly, super will be due within seven business days of each fortnightly pay run. If you pay monthly, super will be due seven business days after month-end.

• New Terminology: Your payroll system will need to calculate super at 12% of "Qualifying Earnings." While this is the new term replacing "Ordinary Time Earnings," for most businesses, it covers largely the same ground: base pay plus allowances and bonuses. (The ATO has provided a fact sheet on Qualifying Earnings for further detail).

• Reporting: Every time you process payroll through Single Touch Payroll (STP), you will also be required to report both the earnings and the corresponding superannuation you owe.

• New Employees: For new hires, there's a slightly longer window of around 20 business days to sort out their super fund details, but after that, the seven-business-day rule applies.

Why You Need to Care: The Cost of Non-Compliance

Missing these new, tighter deadlines can lead to significant penalties via the Superannuation Guarantee Charge (SGC). This includes:

• The unpaid super amount itself.

• Interest that compounds daily.

• Administrative penalties that can add up to 60% of the shortfall, depending on your compliance history.

• Severe penalties if you get fund choice rules wrong.

Crucially, these penalties are not tax deductible; they come straight off your business's bottom line. While the ATO has signalled a reasonable approach in the first year for businesses genuinely trying to comply, "transitional relief" doesn't equate to a "free pass." Your systems must be ready.

What to Do Now (You've Got Approximately 5 Months)

Don't wait until the last minute. Here's an essential checklist to start with:

1. Check Your Payroll Software: Most major platforms like Xero, MYOB, QuickBooks, and KeyPay have confirmed they will be ready. However, confirm with your specific provider that your current plan includes the "Payday Super" functionality. Some businesses may require a plan upgrade. Important for SBSCH Users: If you currently use the ATO’s Small Business Superannuation Clearing House (SBSCH), be aware that this service is being decommissioned. The SBSCH will officially close on 1 July 2026. All businesses using it must transition to an alternative SuperStream-compliant software provider (such as Xero, MYOB, QuickBooks, or KeyPay) before this date.

2. Update Employee Records: Ensure you have current, validated super fund details for all your employees.

3. Talk to Us About Cash Flow: This is perhaps the biggest adjustment. The total amount of super you pay over a quarter will likely remain the same, but it will be spread across multiple smaller, more frequent payments. Some businesses will find this easier; others will need a new strategy. We strongly suggest starting to build a buffer now. Even putting aside a small amount each week can significantly ease the transition in that first month.

4. Review Your Payroll Timing: Consider whether your current pay cycle (weekly, fortnightly, monthly) still makes the most sense under these new rules. Some businesses are finding that monthly payroll, and therefore monthly super payments, might simplify management.

Elite Accounting Solutions is Here to Help

The legislation is set, and the clock is ticking. Your priority now is to ensure your systems, your cash flow, and your team are ready for July 2026.

For our existing clients whose superannuation lodgements we manage: You do not need to worry about the immediate transition. We have proactively moved your records to a new, compliant software platform (either Xero or QuickBooks) to ensure a seamless shift. As Payday Super requires payments every pay cycle, it's more efficient for you to manage this directly. Therefore, before the new financial year, we will provide dedicated training on how to manage these "Payday Super" payments within your software. We will get you ready and empower you with control, while always being here to support you.

For all our new clients: Rest assured, Elite Accounting Solutions is here to support you through every step of this transition. From system reviews and cash flow planning to ensuring ongoing compliance, we have the expertise to help you adapt seamlessly.

Don't leave your Payday Super preparations to the last minute. Contact us today to discuss how these changes will impact your business and how we can help you get ready.