Payday Super is coming from 1 July, and employers need to act now to understand their obligations and get on top of cashflow.
The biggest change to Australia’s super system in decades starts in just months. Here’s 9 actions you need to take to prepare for super changes for your employees and eligible contractors.
- Prepare your payroll to align with your super payments. If you pay employees and eligible contractors weekly, fortnightly or monthly, you will need to process super at the same time.
- Review your cash flow to manage more frequent super payments. It is important to note that in July you may have several payments due – both the April to June quarterly payment due by 28 July, plus weekly/fortnightly payments starting in July. You must plan cash flow accordingly.
- Understand what qualifying earnings (QE) is and how this is reported through Single Touch Payroll (STP). QE is a new term which includes ordinary time earnings, all commissions, salary sacrifice contributions, and other amounts paid to employees and eligible contractors. For most employers there is no change to the amount of super you need to pay employees and eligible contractors, but both super liability and QE must be reported through STP.
- Check your software will support QE reporting from 1 July 2026. If you are currently using the Small Business Superannuation Clearing House (SBSCH) you will need to download your records and transition to a new clearing house or other software. Make sure you have tested any new software before July to iron out any issues.
- Check employee and eligible contractor super funds details are up to date. Make sure to ask employees and contractors if there have been any changes to their details before July. You may face late fees if payments are rejected due to incorrect details.
- Know where to check for rejected super payment processing errors and what you must do to correct these. This could be your super fund, clearing house or digital service provider (DSP). If you use Xero to process super payments, generally you will receive an email if it fails. Here’s a link to check error messages in Xero.
- Understand the 7 business days rule. Employers must ensure super payments reach employees’ and eligible contractor super funds in this timeframe. This includes any rejected payments as there is no extension to the 7 business days if the payment is rejected by the super funds. Some exceptions apply to first-time payments to funds for new employees.
- Understand how long it will take for super contributions to be received by the super funds.
- Understand the consequences of late payments and the changes to super guarantee charge (SGC). Late payment offset is not available for late super payments for the final quarter due 28 July 2026. Under Payday Super, late payments will be automatically applied under the law.
Payday Super is a big change, and there’s lot of steps to get ready. You can read more about Payday Super by downloading our factsheet.
If you need assistance with Payday super please email office@ultimate-tax.com.au or call 61443370.
