Payday Super is coming
HERE’S WHAT YOU NEED TO KNOW
From 1 July 2026, employers will be required to pay superannuation at the same time as wages, rather than quarterly.
This change - known as payday super - does not increase the amount of super paid, but it significantly changes the timing of payments.
For employers, this will affect cash flow and payroll processes, and for the June/July period this year - tax deduction timing, and the pattern of super contributions for employees - particularly higher income earners.
Preparing early will help avoid compliance risk and allow for a smoother transition.
WHAT IS CHANGING - THE DETAIL
From 1 July 2026:
Super must be paid at the same time as wages
Contributions must be received by the employee’s super fund within 7 days of payday
Super will shift from a quarterly obligation to a regular payroll expense
Late payments may trigger superannuation guarantee charge (SGC), interest, and penalties
The super guarantee rate itself remains unchanged at 12%. This reform affects when super is paid, not how much is paid.
The objective of payday super is to improve the timeliness and transparency of super contributions and reduce the risk of late or unpaid super.
CHANGE TO HOW SUPER IS CALCULATED – QUALIFYING EARNINGS AND ANNUAL CAP
From 1 July 2026, super will also be calculated using qualifying earnings (QE), which replaces the current ordinary time earnings (OTE) framework.
Qualifying earnings provide a single, consistent earnings base used to calculate both super guarantee (SG) obligations and any super guarantee charge (SGC) where contributions are late.
At the same time, the maximum contribution base — which limits how much super must be paid for high income earners — will move from a quarterly cap to an annual cap.
This means:
SG will be calculated on qualifying earnings rather than ordinary time earnings
The maximum contribution base will apply across the financial year, rather than resetting each quarter
Once an employee reaches the annual cap, no further compulsory SG contributions are required for the remainder of the financial year
For most employers, qualifying earnings will not significantly change the amount of super payable. However, for higher income employees, the move to an annual cap may result in contributions being made earlier in the financial year compared to the current quarterly system.
While this change is primarily structural, the most significant practical impact for employers remains the timing of super payments and associated cash flow implications.
WHAT THIS MEANS FOR BUSINESS OWNERS
The most significant impact for employers will be cash flow and payroll timing.
Under the current system, employers may pay super up to 28 days after the end of each quarter. This creates a timing buffer between paying wages and funding super.
From 1 July 2026, super becomes a regular payroll expense and must be received by the employee’s super fund within 7 days of payday.
Contributions must be funded much earlier, reducing flexibility around payment timing.
This means employers should:
Build super payments into regular cash flow forecasts
Ensure payroll and clearing house systems can meet the new timing requirements
Confirm their payroll provider is ready for payday super
Late payments may result in super guarantee charges, interest and administrative penalties, which can be significant.
OPTIONS FOR JUNE 2026 QUARTER
The final quarterly super payment before Payday Super begins (April–June 2026) creates an important timing decision.
Employers have two compliant options:
Option 1 - Pay June quarter super before 30 June 2026
Implications:
The contribution is tax deductible in the 2026 financial year
The contribution counts towards the employee’s FY2026 concessional contributions cap
For high income employees, this may increase the risk of exceeding the concessional cap in FY2026.
Option 2 - Pay June quarter super by 28 July 2026 (the current due date)
Implications:
The contribution is tax deductible in the 2027 financial year
The contribution counts towards the employee’s FY2027 concessional contributions cap
Combined with payday super contributions starting from July 2026, this may increase the risk of exceeding the concessional cap in FY2027, particularly for high income employees
Both options are fully compliant. The key difference is which financial year the contribution is received and deducted.
Employers should consider both their own tax position and the potential impact on affected employees when deciding which approach to take. Where relevant, employers should notify affected employees of the timing of contributions so employees can seek independent advice if required.
CONSIDERATIONS FOR HIGH-INCOME EARNERS
Payday super changes the timing of when contributions are received by super funds.
Because concessional contribution caps apply based on when contributions are received, some employees - particularly higher income earners - may reach their concessional cap earlier than expected.
This risk is especially relevant during the transition period, where contribution timing between June and July 2026 may result in multiple quarters’ worth of contributions being counted in the same financial year.
This does not increase the super guarantee rate, but it may affect employees’ personal tax position if concessional contribution caps are exceeded.
Employers are not responsible for managing employees’ contribution caps. However, where timing changes may affect employees, employers should notify affected employees so they can seek advice and consider their personal circumstances.
PRACTICAL STEPS FOR BUSINESS OWNERS TO TAKE NOW
To prepare for payday super, employers should:
Decide when to pay the June 2026 quarter super contribution
Identify any high income employees who may be affected by contribution timing
Notify affected employees so they can seek advice if required
Confirm payroll and clearing house systems can meet the new timing requirements
Update cash flow forecasts to reflect earlier super payment timing
Consider transitioning to paying super with payroll ahead of 1 July 2026
Early preparation will help ensure a smooth transition and reduce compliance risk.
FURTHER GUIDANCE
The ATO has published employer checklists and qualifying earnings guidance to assist with preparation:
If you have any questions about how these changes impact you or your team, please reach out to us to discuss.
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