From 1 July 2026, employers must pay superannuation guarantee (SG) contributions at the same time wages are paid each pay run, rather than quarterly.
Further, those contributions must be received by the employee’s fund within seven business days of the pay day.
Why the change is happening
- The previous quarterly model allowed up to four months’ lag between payroll and super payment, which has contributed to an estimated $5.2 billion annually in unpaid super.
- By aligning super payments with wages, the system aims to improve transparency, ensure timely contributions, and reduce unpaid super incidents.
What employers need to prepare for
- Review payroll processes and cash flow: Because super must be paid with each pay run, you must ensure funds are available at each cycle, not post-quarter.
- Update payroll system and workflows: Confirm your payroll software supports the new cadence and can make SuperStream payments in line with the seven-business-day requirement and review internal processes to ensure super can be paid easily, and on time each pay day.
- Ensure employee fund details are up to date: Incorrect fund or account details will delay compliance under the tighter timeframe.
- Prepare for compliance and enforcement: While the Australian Taxation Office (ATO) has indicated a more pragmatic stance during early implementation, penalties for late or missing payments still apply. Late or missed payments will trigger penalties, including the Super Guarantee Charge (SGC), which adds interest (10%) and admin fees. This charge has increased and will increase further for repeat offenders. It is also not tax-deductible.
Additional important points
- The super rate of 12% rate remains unchanged
- The reforms apply to all employers and employees, including those paid into an SMSF when directors are involved.
- If you currently are using the ATO Small Business Clearing House to pay super, this will be closing from 1 July 2026, so an alternative clearing house or payroll software needs to be used.
In summary
The move to pay-day super is a big change but can be managed with early preparation and a review of cash flow and super payment processes before 1 July 2026. We’ll work with our clients ahead this date to ensure a smooth transition, but if you have any questions in the meantime, please reach out to your bookkeeper or accountant.
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