As part of the Securing Australians’ Superannuation package announced in the 2023–2024 Federal Budget, the government proposed a “payday super” reform. Instead of the current requirement to pay quarterly, under the proposal employers will be required to pay their employees’ superannuation guarantee (SG) contributions at the same time as their salary or wages (on “payday”) from 1 July 2026.
What do the proposed changes mean for you? A newly released government fact sheet sets out some key elements of the policy.
From 1 July 2026, SG contributions will need to be made on “payday”. This is the date an employer makes an ordinary time earnings (OTE) payment to an employee. When OTE is paid, there will be a new seven-calendar-day “due date” for the payment to arrive into an employee’s superannuation fund. Some limited exceptions will apply: small or irregular payments outside the usual pay cycle won’t be considered a payday until the next OTE payday occurs; and contributions for new employees won’t be due until after the first two weeks of employment.
The SG charge framework will be updated for the payday super environment, reflecting the seriousness of underpayment or late payment of the SG. The revised framework will:
Assessments of the SG charge will be made by the ATO and can be triggered by voluntary disclosure by an employer, an employee notification, or where there is a non-payment detected by the ATO. If the SG charge is not paid by the due date, additional interest and penalties will apply. In-depth information about the changes to the SG charge can be found in the fact sheet.
Contributions will automatically count towards the earliest possibly payday not yet assessed for SG charge and which still has an outstanding shortfall so employers no longer need to make an election or choose the period for which each late contribution should count.
Changes to support the transition to payday super, and to protect employees during onboarding, include the following:
Legislative design is planned for the second half of 2024, and the ATO will engage with industry to inform the administrative aspects. It’s important to remember that some of these details may be refined as a result of consultation, so keep an eye out for emerging news.
Source: Treasury Publication - Payday Super ; ATO - Payday superannuation