The Australian Government is changing the way superannuation contributions are paid. The Payday Super reforms are expected to come into effect from 1 July 2026 and will dramatically change the way companies in Australia will be expected to pay contributions.
These reforms are designed to strengthen the retirement savings system but will require businesses to be incredibly vigilant about when they pay superannuation guarantee (SG) payments.
For employers, this means a new wave of compliance obligations that will reshape payroll processes and responsibilities.
Understanding Payday Super
At its core, Payday Super says that employers must pay SG contributions at the same time as paying employees their wages, with contributions needing to reach super funds within seven business days of payday.
This replaces the current quarterly payment schedule and introduces the concept of “Qualifying Earnings” (QE), which forms the basis for SG calculation. The objective is to ensure timely contributions and reduce the estimated $5.2 billion of unpaid super found in the 2021-22 period.
Mary Delahunty, CEO of the Association of Superannuation Funds of Australia states, “Payday super is a game-changer for all working Australians,” emphasising the impact these reforms will have.
Employer Challenges
Employers will also be required to report QE and SG liabilities via Single Touch Payroll (STP), offering the Australian Taxation Office (ATO) real-time visibility of compliance. Penalties for late or missed payments will also be changing, including interest on shortfall amounts and heavy administrative penalties.
Implementing these changes is no small feat, and payroll systems will need to be updated to handle the increased burden.
For many businesses, especially small to medium enterprises, adjusting in-house payroll to meet these demands will be complex and resource-intensive.
Managed Payroll Matters More Than Ever
For employers navigating this new legislative landscape, the benefits of partnering with a managed payroll provider are now more valuable than ever.
Managed payroll services offer automation, compliance assurance and reduce risks associated with manual processing and frequent payment deadlines.
Importantly, payroll providers experienced with Payday Super reforms can ensure timely calculation, remittance, and reporting aligned with the latest legislative requirements. This not only helps businesses avoid costly penalties but also frees internal resources to focus on core business operations.
Preparing for Payday Super with Expert Support
For employers seeking a smooth transition and peace of mind, Astute Payroll offers tailored Managed Payroll services designed to handle the demands of Payday Super compliance efficiently. With expert knowledge, up-to-date technology, and proactive support, Astute Payroll helps businesses meet their new obligations confidently.
