The Federal Government’s Payday Superannuation reforms are moving forward, with the Treasury Laws Amendment (Payday Superannuation) Bill 2025 now introduced into Parliament. The ATO has released a draft guideline outlining how it plans to apply the new rules during the first year of implementation.
These changes will have a real impact on how often you pay super, how you manage cash flow, and how you meet your compliance obligations — so it’s important to start preparing early.
What’s changing?
From 1 July 2026, employers will be required to pay superannuation guarantee (SG) contributions on payday, instead of quarterly. Contributions must be received in employees’ super funds within seven business days of payday.
The ATO has acknowledged that this change presents practical challenges — including payroll system readiness, cash flow management, and administrative burden — but the implementation timeline remains unchanged.
To support employers during the transition, the ATO’s Draft Practical Compliance Guideline (PCG) 2025/D5PCG sets out a risk-based compliance framework. Employers will be classified as low, medium, or high risk depending on their efforts to comply and the accuracy of their payments.
Key features of the Payday Superannuation rules
- Payday payment requirement: Superannuation must reach employees’ funds within 7 business days of each payday (revised from 7 calendar days in earlier drafts).
- Qualifying Earnings: The new base for SG calculations, replicating the concept of ordinary time earnings.
- Annual contribution cap: Replaces the quarterly maximum contributions base — contributions are made on all Qualifying Earnings until the annual cap is reached.
- Reporting changes: Updates to Single Touch Payroll (STP) and SuperStream systems to align with payday super and Qualifying Earnings reporting.
- Shortfall and interest adjustments: Shortfalls must match the actual short/late-paid amount, with interest accruing until the contribution is paid.
- Penalty changes: Adjustments to how penalties and general interest charges apply or may be remitted.
What employers should know
With less than a year to prepare, employers should start planning early.
Key steps include:
- Reviewing and testing payroll and accounting systems to ensure they can process super payments each pay cycle.
- Confirming STP and SuperStream configurations align with upcoming reporting requirements.
- Validating pay codes and earning categories to ensure accurate calculation of Qualifying Earnings.
- Assessing cash flow impacts and planning for more frequent super payments.
- Engaging with payroll providers and superannuation funds early to confirm readiness.
Final thoughts
While the ATO says it will take a practical approach in the first year, it will also have better systems to track super payments. This means it can more easily see when super hasn’t been paid on time or in full — for example, if an employee’s pay includes super but no matching payment is made to their fund.
To avoid problems, start preparing now so your business is ready for payday super by 1 July 2026.
Got any super questions?
For further information, please reach out to our preferred superannuation partner, First Super at 1300 360 988 or request an appointment online.
