The “payday super” legislation, now passed by Parliament, significantly changes how superannuation will be paid. From 1 July 2026, employers must pay their employees’ super contributions within seven business days of payday, replacing the quarterly system.
The reforms strengthen the superannuation system by helping the ATO to enforce the law and identify employers not making contributions, while benefiting employees through more frequent contributions that will grow and compound over their working life.
Currently, employers generally remit superannuation guarantee (SG) contributions quarterly. Contributions for a quarter are due by the 28th of the following month. This quarterly cycle has been associated with persistent unpaid and late super. Government impact analyses and ATO estimates put unpaid SG in the billions of dollars per year, with employees often discovering missing super only after significant delays, or when employers become insolvent.
In May 2023, the government announced its intention to require employers to pay super concurrently with salary and wages from 1 July 2026. The central idea was that every pay cycle would carry the corresponding super contribution, rather than employers building up SG liabilities until the end of the quarter. The goals were to reduce unpaid super, get contributions invested earlier and more consistently, and make it easier for employees and the ATO to see problems quickly.
Treasury refined the design throughout 2023 and 2024, and draft legislation was released in March 2025.
In October 2025, the government introduced the payday super Bill into Parliament. Broadly, the Bill included four key changes.
First, it proposed to replace quarterly SG payments with a requirement to pay super at the same time as salary or wages, meaning that every weekly, fortnightly or monthly pay run would trigger its own SG contribution obligation.
Second, it proposed to allow a short window for processing, with contributions counted as “on time” if the employee’s fund received them within seven business days after payday (or 20 business days in certain specific circumstances, such as where an employee changes super funds or a new employee commences). This is designed to accommodate clearing houses and banking processes while still being a substantial tightening of the previous timetable.
Third, it included a redesign of the SG charge regime to better fit a pay cycle model and to increase the consequences of non compliance. Unpaid or late SG would give rise to the SG charge more quickly. Interest and administration components were recalibrated to ensure employees are fully compensated for the delay, and the framework deliberately targeted repeated or deliberate non compliance with escalating penalties. The long term intent was to make “catching up later” much more expensive than paying on time.
Fourth, the Bill included amendments intended to simplify employee fund choice and onboarding. The idea was to make it easier for employees to nominate an existing fund when they start a new job and for employers to obtain correct fund details promptly, reducing delays in getting contributions to the right place.
Parliament passed the payday superannuation legislation in early November 2025. The core elements remained intact:
During Parliamentary debate, the focus turned to implementation issues such as the compliance burden for small businesses, transitional arrangements and the role of the ATO in monitoring.
The final law includes transitional administrative settings, including the phase out of the ATO Small Business Superannuation Clearing House (SBSCH). There is no change to the start date or the basic requirement to pay super at or around payday.
Employers and advisers therefore now have reasonable certainty: from the first pay on or after 1 July 2026, super must move with payroll, not with the old quarterly calendar.
One of the most tangible changes arising alongside payday super is the closure of the SBSCH. For years, the SBSCH has allowed small employers (broadly, those with fewer than 20 employees or turnover under $10 million) to make a single quarterly payment to the ATO, which then distributed contributions to employees’ funds. That model suited infrequent, bulk payments, but it is not well aligned with a pay cycle system.
From 1 October 2025, the SBSCH closed to new users. It will cease operating altogether from 1 July 2026. Existing eligible employers can continue to use it up to the end of the 2025–2026 year, but they cannot rely on it for super contributions relating to pay days on or after 1 July 2026. After mid 2026, there’ll be no option to route contributions through the ATO’s free clearing service.
Businesses need a clear understanding of what’s changing and when. Up to 30 June 2026, the existing SG framework, including quarterly due dates, continues to apply. From the first pay run on or after 1 July 2026, however, each pay carries an SG obligation that must be met promptly. The contribution is considered on time only if the fund receives it within seven business days of the wage payment. Waiting until the end of the month or end of the quarter to “catch up” will no longer be within the law. At the same time, the SG rate (12%) and basic coverage rules are not fundamentally altered by these reforms; the real shift is timing and enforcement.
It's important for businesses to take this opportunity to ready their payroll and payment processes. A useful question is, “If you had to pay super every pay cycle tomorrow, could your current processes cope?” If the answer is no (or not without manual workarounds), there’s work to do. That may include confirming that payroll software calculates SG correctly on each pay, checking whether the software can generate SuperStream compliant payment files or connect directly to a clearing house, and deciding when in the pay cycle super payments will actually be initiated. For some employers, it will make sense to process the super payment file on payday; others may schedule it for the following business day, bearing in mind the seven day deadline.
Cash flow is another aspect to consider. Under payday super, employers will move from paying four large super instalments per year to paying many smaller instalments. The total outgoing amount is the same, but the timing is different. Some businesses, especially those with tight or seasonal cash flow, may need to revisit their internal cash flow planning.
Small businesses that have been using the SBSCH will need to identify and implement an alternative arrangement. There are currently three main pathways:
Many businesses will already have access to one of these options, but others will need to register, set up bank accounts and employer details, and migrate their employee data.
From 1 July 2026, payday super becomes business as usual. For employers, ongoing compliance will revolve around paying each cycle on time, keeping accurate records and dealing promptly with errors.
Each pay run will involve calculating SG for each eligible worker, transmitting the contribution electronically with the required data, and ensuring that the fund receives it within seven business days (or 20 business days in certain situations). Employers will need internal routines to make sure this happens; for example, assigning responsibility to a payroll officer, scheduling payment runs and building in checks that the payments sent match the amounts recorded in payroll.
Record keeping obligations will remain familiar. Employers will continue to provide payslips showing the super amount accruing for each pay. Their systems should keep a clear audit trail of contributions: who was paid, how much, for which period, to which fund and on what date. Many clearing houses and payroll systems already produce reports that can be used for this purpose. Given the ATO’s increased ability to compare fund reported contributions with payroll and Single Touch Payroll (STP) data, having clean internal records will help resolve any discrepancies quickly.
When errors occur, whether because of a missed pay cycle, incorrect fund details or a processing failure, the updated SG charge rules will generally apply more quickly. If a payment has been late or missed, employers will usually need to lodge an SG charge statement and follow the ATO’s processes to rectify the issue. Prompt self correction is likely to be looked on more favourably than waiting for the ATO to detect the problem.
From 1 July 2026, employees should start seeing super contributions credited to their accounts after each pay rather than quarterly. Their payslips will continue to show SG amounts, and it will become easier for them to compare what appears on the payslip with what appears in their super fund or myGov. The reforms are designed to reduce the risk that months of super go unpaid without detection, and to improve long term balances by getting money into funds sooner.
It will continue to be important for employees to keep their super fund details up to date with their employer, particularly when starting a new role, and to periodically check their super statements. Beyond that, the onus is squarely on employers to comply with payday super, not on individual employees to manage the system.
Source: www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/payday-superannuation
www.ato.gov.au/businesses-and-organisations/super-for-employers/payday-super/about-payday-super