Double the Super? Late payment offset removed for June 2026 quarter

Key points:

From 1 July 2026 the Payday Super regime will require employers to pay Superannuation Guarantee (SG) contributions at the same time as employee wages, rather than quarterly, with payments needing to reach the employee’s super fund within 7 business days of each payday.

For more information in relation to preparation for Payday Super, see our previous article on what Australian employers need to know before 1 July.

As part of the transition to Payday Super, a critical one-off change applies to the June 2026 quarter that may significantly increase costs for some employers.

What’s changing?

Under the current system, if SG contributions are paid late:

• Employers must lodge a Superannuation Guarantee Charge (SGC) statement with the ATO; and
• A Late Payment Offset (LPO) may be available to reduce the SGC by the amount of SG already paid to employees’ super funds.

This mechanism generally prevents a “double payment” outcome. However, LPO will not apply to the June 2026 quarter.

June 2026 quarter – the key risk

Under the transitional provisions, all payments received in the employees’ super funds by 28 July 2026 can be allocated to the June 2026 quarter. However the LPO will not be available for the June 2026 quarter (the final quarter before Payday Super commences).

Employers should work through transition to Payday Super carefully, as those who do not meet the SG deadline for the June 2026 quarter and pay late may face full SGC exposure, even if SG contributions are already paid to super funds. Alternatively there could be an exposure under Payday Super, due to late payments.

Employers should ensure all SG obligations for the June 2026 quarter are accurately calculated and paid on time to avoid SGC which is payable to the ATO and is not deductible for income tax purposes.

Practical examples

Example 1 – Late payment offset applies (current system)

Facts:

Employer fails to pay SG of $100,000 for the March 2026 quarter by the due date of 28 April 2026. Employer pays $100,000 directly to employees’ super funds on 29 April 2026 (i.e. SG payment is late).

Outcome:

Employer must lodge an SGC statement with the ATO. SGC shortfall is calculated based on salary and wages (not on Ordinary Time Earnings (OTE)), plus interest (10%) and administration fee.

Under the current system, however, the $100,000 late payment can be claimed as a LPO against the SGC liability. This reduces the “double payment” effect.

The practical result is that the Employer still effectively pays interest and admin fees, but does not pay SG twice, to the extent the late contribution offsets the SGC shortfall component[1].

[1] In instances where salary and wages are higher than OTE (for example, due to overtime or termination payments, etc.), the amount of shortfall component calculated for SGC purposes may be higher than the amount of SG paid.

Here is an example of the current system:

¹For calculation of shortfall, assumed that salary and wages are equal to OTE
² Amount of interest is provided for demonstration purposes
³ Assumed 50 employees at $20 per employee
This example, excludes any Part 7 Penalty that may otherwise apply

Example 2 – No late payment offset for June 2026 quarter (transitional provisions)

Facts:

Employer fails to pay SG of $100,000 for the June 2026 quarter by the due date of 28 July 2026. Employer pays $100,000 directly to employees’ super funds on 29 July 2026 (i.e. SG payment is late).

Outcome:

Employer must lodge an SGC statement with the ATO. Late payment offset is not available for this quarter (due to Payday Super transitional rules).

The practical result is that the employer has already paid $100,000 to the employees’ super funds and must pay full SGC to the ATO (calculated on salary and wages + interest + admin fee). This creates a double payment outcome.

Here is an example of the transitional rules:

¹ For calculation of shortfall, assumed that salary and wages are equal to OTE
² Amount of interest is provided for demonstration purposes
³ Assumed 50 employees at $20 per employee
This example, excludes any Part 7 Penalty that may otherwise apply

Recommendation

Where an employer anticipates that SG contributions for the June 2026 quarter cannot be paid on time, careful consideration should be given to transitional provisions and whether it would be appropriate lodging an SGC statement and remitting the liability directly to the ATO, rather than making a late payment to the super fund. This approach may help mitigate a double payment outcome under the transitional rules.

If an employer has already made a late SG contribution to a super fund, an SGC statement will still need to be lodged. In these circumstances, employers may consider:

• Reviewing whether the excess contribution can be applied against future SG obligations for ongoing employees; and
• Assessing the recoverability of any overpayment from employees’ super funds, particularly for terminated employees, where recovery may be impractical or costly.

Next steps

For June 2026 quarter, we recommend employers:

• Review SG calculations for accuracy and completeness;
• Ensure sufficient lead time for payments to be received by super funds (not just processed);
• Identify and address any payroll or clearing house delays; and
• Understand transitional provisions for Payday Super, and prioritise timely payments for the June 2026 quarter to avoid unnecessary cost.

If you have any questions on transition to Payday Super or would like assistance in assessing how these changes will affect your organisation, please contact one of our Employment Taxes team members or your usual Pitcher Partners adviser.