Dear Valued Client,
We’re writing to give you notice about one of the biggest changes to employer super obligations in over a decade. From 1 July 2026, the way you pay super for your employees is changing under the new Payday Super rules — and the rules apply to every employer, with no exemptions for small businesses.
In short, superannuation will need to be paid every payday, not quarterly, and the penalties for getting it wrong are significantly higher than they are today. The good news is that with a bit of preparation now, the transition should be straightforward — and we’re here to help you through it.
Under the new rules, you must pay your employees’ super guarantee (SG) within 7 business days of processing the payroll, not quarterly. The rules apply to every employer regardless of size or industry — there are no exemptions for small businesses.
What is changing
There are four key changes to be aware of:SG must be paid on payday. Contributions must be received by your employee’s super fund within 7 business days of each payday.SG is calculated as 12% of qualifying earnings (QE) — a new, broader base that replaces ordinary time earnings (OTE). QE captures more components of pay than OTE did, see the below table showing the difference. The practical effect is that for many employers the super base will be meaningfully larger than it was under OTE — so even before the rate change, the dollar value of SG per pay run will increase. It’s worth running a sample pay cycle now to see how QE changes your numbers.
How OTE and QE compare:
The Small Business Superannuation Clearing House (SBSCH) closes permanently on 1 July 2026. If you use it, you must transition to another solution before then.Single Touch Payroll (STP) reporting is being upgraded — you’ll need to report QE and super liability each pay run. In practice this means the ATO will see your super obligation in real time, so late or missed contributions will be visible to them almost immediately.
What happens if you don’t comply
If contributions aren’t received by the fund within 7 business days of payday, the Super Guarantee Charge (SGC) applies — and the SGC regime is designed to be punitive. Unlike a normal super contribution, the SGC includes the unpaid super (if it remains unpaid), nominal interest, and an administration component, and none of it is tax deductible.
The ATO calculates interest from the period of unpaid superannuation up to the date of lodging the SGC form, not up to the date of payment. For example, if an employer were to pay superannuation 2 weeks late and lodges an SGC form 6 months later, the ATO will calculate interest for the 6 months not the 2 weeks.
On top of the SGC, additional penalties of up to 200% of the SGC may apply, and further penalties of 25% (or 50% for repeat conduct) can apply for unpaid SGC. Directors can be held personally liable through Director Penalty Notices.
In short: late or missed super becomes significantly more expensive — and non-deductible — under the new rules.
What you need to do now
Talk to your payroll software provider to confirm they will be Payday Super-ready by 1 July 2026.Review your cash flow — super will need to be funded every pay cycle, not quarterly.If you use the SBSCH, choose a replacement clearing house or super payment method now. We recommend using the accounting software Xero, feel free to contact us to assist with the transition.Check that all employee details and super fund information on file are complete and correct.Make sure all SG up to 30 June 2026 is paid in full and on time under the existing quarterly rules.
Further Information (ATO)
- PAYDAY SUPER — OVERVIEW AND HOW IT WORKS
- PAYDAY SUPER CHECKLIST FOR EMPLOYERS
- SUPER GUARANTEE EMPLOYER OBLIGATIONS
- SUPER GUARANTEE CHARGE (SGC) STATEMENT AND CALCULATOR
- ABOUT PAYDAY SUPER (HOW IT WORKS, DUE DATES, QUALIFYING EARNINGS)
- SINGLE TOUCH PAYROLL (STP) REPORTING
- DIRECTOR PENALTY NOTICES
If you have any concerns about whether your business is ready for Payday Super, or if you have past super shortfalls that need to be disclosed, please get in touch — the earlier we have the conversation, the more options you have. Voluntary disclosure before the ATO comes asking can significantly reduce penalties, and we can walk you through the process.
Acting early — particularly through voluntary disclosure — can significantly reduce penalties.
Please don’t leave this until June. The cost of getting Payday Super wrong is substantial and non-deductible — but it’s entirely avoidable with a bit of preparation now.
Kind Regards,
Khourys & Associates