Australia is about to fundamentally change how and when employers meet their superannuation (super) obligations (Australia's compulsory retirement savings system). From 1 July 2026, the longstanding quarterly Super Guarantee (SG) payment system will be replaced by Payday Super, requiring employers to pay superannuation contributions at the same time as wages.
The reform, announced by the Australian Government through the Fair Work Ombudsman and the Australian Taxation Office (ATO), aims to improve retirement outcomes for employees and reduce unpaid or late superannuation. For payroll teams and their stakeholders, it entails significant operational and system changes rather than just a slight timing adjustment.
What Is Payday Super?
Under Payday Super, employers must calculate and pay super guarantee contributions on payday, with the payment required to be received by the employee’s super fund within seven working days (for regular cycles and off-cycles). This replaces the current quarterly deadlines that allow contributions to be paid up to 28 days after the end of each quarter.
The change affects all employers and eligible employees and will take effect from 1 July 2026 (the start of the 2026-2027 fiscal year). From that date, Super cannot be treated as a periodic or end-of-quarter process. It becomes a real-time payroll and compliance obligation.
Key Changes Payroll Teams Need to Understand
The reform extends well beyond payment frequency, with several core concepts and processes changing simultaneously.
First, the basis for calculating superannuation is expanding. Super Guarantee will now be calculated at 12% of qualifying earnings (QE), a new definition that combines ordinary time earnings (OTE) with additional payments that were previously excluded in some cases. Payroll systems will need a thorough review to ensure QE is correctly identified and calculated.
Second, payment deadlines become much tighter. Contributions must reach the super fund within seven business days of payday. This places new pressure on payroll cut-off times, payment workflows, clearinghouse arrangements, and bank processing timelines, and therefore on the business's cash flow position.
Third, the Super Guarantee Charge (SGC) system is undergoing a significant overhaul. Late or missed payments will prompt quicker activation of SGC and will be based on QE rather than salary and wages. Interest will accrue daily at the standard rate, and an administrative uplift may be added depending on the employer’s compliance history. Unlike the current system, SGC will be assessed by the ATO and will be tax-deductible, changing both risk exposure and financial treatment.
Reporting and System Impacts
Single Touch Payroll (STP) reporting will also continue to develop. Employers will be required to report both QE and super liability, increasing expectations for data accuracy and reducing acceptance of estimates or manual adjustments.
On the payments side, Australia’s SuperStream standards will be updated to support faster processing. This will include the use of the New Payments Platform, with clearer messaging back to employers, gateways, and clearinghouses, so issues like invalid member details or fund identifiers can be fixed quickly. In parallel, upgrades to fund validation will provide earlier visibility into fund status changes, such as mergers or identifier updates, reducing failed contributions and last-minute rework. This offers employers an opportunity to remain compliant in real time. Also, new verification services will allow employers to confirm that a super fund can accept a contribution before payment is made, helping to reduce failed or misdirected payments.
Meanwhile, the Small Business Superannuation Clearing House is being phased out. It closed to new users in October 2025 and will be fully discontinued by 30 June 2026, meaning all employers must switch to alternative payment options before Payday Super becomes effective.
What This Means for Payroll
For payroll professionals, Payday Super eliminates the buffer offered by quarterly processing. Errors that used to show up weeks later will now result in nearly immediate noncompliance. Payroll schedules, funding arrangements, approval processes, and vendor agreements will all need reassessment. Employers paying weekly or fortnightly will experience a significant increase in payment volume. Those relying on manual super processes or legacy clearing house solutions are likely to face the most pressure first.
The ATO has been clear in its message that employers should not delay acting. Testing payroll readiness, validating data quality, and engaging with payroll system and super providers now will significantly reduce transition risks.
Australia’s shift to Payday Super reflects a global trend: governments are synchronising contributions with real-time payroll reporting and payments. This change is also evident in taxes, social security, and wage protection worldwide.
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Max van der Klis-Busink, MCIPP, RPP, is the Owner of Passion For Payroll and Vice President of Global Strategy on PayrollOrg’s Board of Directors.
