Key points
- Payday Super regime will commence on 1 July 2026, ensuring employee Superannuation Guarantee (SG) is paid in line with their salary and wages.
- The reform will require employers to pay SG to the employee’s superannuation fund within 7 business days of the Qualifying Earnings (QE) day.
- Implementation will increase administrative burden on employers, necessitating revised processes and supportive systems.
| Update – 3 December 2025
View our latest Webinar explaining Payday Super. We’ll guide you through the key areas that will impact your business and help you refine your transition plan. Update – 4 November 2025 The Payday Super legislation has been enacted following its passage through both houses of Parliament on 4 November 2025. Update – 9 October 2025 The proposed Payday Super bills have been introduced into Parliament on 9 October 2025. A major change from the exposure draft bill and explanatory material is the requirement for employers to remit superannuation guarantee (“SG”) within 7 business days of the Qualifying Earnings (“QE”) day, rather than 7 days of QE day as initially proposed. Business day is defined to mean a day other than a Saturday or a Sunday, or a day gazetted as a public holiday for the whole of a State or Territory. Separately, based on feedback from stakeholders the Australian Taxation Office (“ATO”) has released Draft Practical Compliance Guideline PCG 2025/D5 Payday Super – first year ATO compliance approach, which specifically deals with the allocation of compliance resources during the first year of implementation following the enactment of the legislation. |
Payday Super, proposed to commence from 1 July 2026, is intended to ensure that employee Superannuation Guarantee (SG) is remitted in line with payment of their salary and wages.
Treasury has released an exposure draft bill and explanatory materials for consultation. Payday Super is also a key priority of the Australian Taxation Office’s corporate plan for 2025-26 through to 2028-29, to close the SG gap.
Under the proposed reform, Treasury seeks to legislatively define the term ‘payday’ as a Qualifying Earnings (QE) day, and employers are required to ensure payment of SG to the employee’s superannuation fund within 7 days of QE day. A comparison of the current law and proposed changes is on the following page.
Potential impacts on business
Implementation and the ongoing adherence to Payday Super will increase the administrative burden on employers as they transition to new processes, systems and/or tools.
Employers will require payroll software that automates and validates timely SG payments to super funds. |
More frequent super payments will require careful cash flow management to ensure funds are available for each payment. |
More frequent transactions and tighter deadlines may increase the risk of mistakes and non-compliance |
While the proposed introduction of Payday Super appears simple, the interdependencies of payroll systems, external clearing houses, superannuation funds and regulators means that a mere oversight could have a significant flow-on effect.
Overview of proposed changes
A comparison of the proposed changes as per Treasury’s exposure draft versus the current law is as follows:
| Current law | Proposed law |
| Quarterly contributions to be received by superannuation funds and allocated to the employee’s account within 28 days after the end of each quarter. | Employers will have 7 days for contributions to be received by superannuation funds and allocated to the employee’s account, with exceptions for:
|
| SG obligations calculated with reference to Ordinary Times Earnings (OTE). | SG obligations calculated with reference to QE, a similar definition to OTE. |
| Quarterly maximum contribution base. | Annual maximum contributions base. |
Superannuation Guarantee Charge (“SGC”) comprises of:
|
The SGC comprises of:
|
| All components of SGC are non-deductible. | SGC is deductible (excluding GIC and penalties). |
| Part 7 penalties of up to 200% of the SGC. | Further penalties of up to 50% of the SGC will apply for non-compliance. |
Contractors
Payday Super is also intended to apply to the SG obligations on payments to persons who meet the ‘extended definition’ of employee. For example, third party contractors. SG obligations may apply where a contractor (in an individual or sole trader capacity) is engaged wholly or principally for their own labour and:
| is remunerated for their personal skills | + | must perform the work personally and have no right to delegate | + | is paid by reference to time (e.g. hourly, daily rate) rather than for a specified result |
There are specific SG rules that apply to contracted performers, entertainers and directors which should be considered separately to the above. You can read more about the classification of workers here.
How can we help?
Our People Services team has the national foresight and local insight to assist with:
- Superannuation policy and contract updates to comply with the proposed legislation in relation to employees and contractors.
- System reconfiguration and process rewiring to ensure timely and accurate payment of SG.
- Pay code analysis to ensure compliance with SG obligations, noting that Single Touch Payroll reporting will soon extend to include both QE and SG liability data, leading to increased ATO visibility.
- Analysing and re-designing employee onboarding and SG processes to mitigate rejection of contributions and to ensure timely return of funds to employee’s superannuation accounts.
- Develop robust internal controls to support appropriate governance and payroll validation checks.
