If you employ staff, the way you pay super is about to change.
From 1 July 2026, employers must pay employees their super guarantee on payday, at the same time as salary and wages. It is one of the biggest changes to super compliance in years, and every employer in Australia will need to prepare.
Here is what is changing, what it means for your business, and what you should be doing now to get ready.
Key points
Before we get into the details, here are the key points:
- Super will be paid on every payday instead of every quarter.
- It must be received by the employee’s fund within 7 business days.
- The 12% rate stays the same, but it will be calculated on a new figure called Qualifying Earnings.
- The maximum contribution base rises to $270,830.
- The ATO Small Business Clearing House is closing permanently on 30 June 2026.
- Penalties for late super have been redesigned, and the late payment offset is gone.
- The first year will come with some leniency. After that, employers should expect strict enforcement.
What’s actually changing
The Federal Government’s Payday Super reforms are ending the quarterly super cycle that employers have used for decades.
Instead of making four super payments a year, employers will need to pay super each time they pay wages.
For most businesses, that means moving from 4 super payments a year to 12, 26 or 52 payments, depending on whether staff are paid monthly, fortnightly or weekly. If you pay your team weekly, you will be processing super 52 times a year.
This is not a proposal sitting in draft form.The legislation has passed Parliament, and these changes are now law. Planning for them is no longer optional.
The 7 business day rule
One of the most important parts of the new system is the 7 business day rule.
The ATO puts it this way:
…paid to an employees’ super fund on payday and received by the super fund within 7 business days (unless an extended timeframe applies, such as for new employees).
This means super must be received by the employee’s fund within 7 business days of payday.
That window is about receipt by the fund, not just when you send the payment. Your payroll process, clearing house processing time, and the time it takes the fund to allocate the payment all need to fit comfortably within that period.
There are a couple of important details to be aware of.
For new employees, the first contribution has 20 business days rather than 7. If a fund rejects a contribution because of incorrect information, it is treated as not paid on time until the error is fixed and the payment is made correctly.
Miss the window and you can be hit with the Super Guarantee Charge (SGC). Under the new rules, that exposure exists every payday, not just every quarter.
“Qualifying Earnings” replaces OTE
What is changing is the figure that rate is calculated on. The ATO describes it as follows:
From 1 July 2026 the super guarantee amount is calculated as 12% of qualifying earnings (QE). QE includes OTE, salary sacrifice contributions and other amounts that are currently included in an employee’s salary or wages for super guarantee.
Qualifying Earnings is a new term that pulls together Ordinary Time Earnings (OTE) plus salary sacrifice contributions and a few other amounts already included in salary or wages.
For most employers, the dollar result will be very similar to what you’re calculating now under OTE. But it’s worth pulling apart your pay codes before 1 July 2026 to be sure. This matters most if you pay allowances, commissions or bonuses, where pay codes can quietly drift out of alignment over time.
Two other changes worth flagging
The maximum contribution base is also increasing.
From 1 July 2026, it rises to $270,830 a year, up from $250,000. That puts the maximum SG liability per employee at $32,500 per year.
For many small businesses, the bigger issue is the closure of the ATO Small Business Clearing House. It closed to new users on 1 October 2025, and from 30 June 2026, it will cease entirely. After that date, you will not be able to log in, even to retrieve historical records. If you are still using it, finding a replacement before then is urgent. This is not something to leave until the last minute.
The Penalties Have Changed Too
The penalties for falling behind on super have been rebuilt from the ground up.
Now
Penalties are a maximum of 200% of the SGC, which can be remitted in part or in full.
From 1 July 2026
Penalties are 25% or 50% of the unpaid SGC, depending on any prior penalties.
Previously, employers could reduce an SGC liability by paying late super before the ATO assessed it. From 1 July 2026, paying late super before an ATO assessment will not reduce the charge.
The SGC itself has also been redesigned. Once assessed, it can include the SG shortfall, general interest charges, a 60% administrative uplift, and a Choice loading penalty of 25% or 50% where the choice of fund rules have not been followed.
In short, the buffer that quarterly super gave small employers is largely gone. So is the option to quietly fix things after the fact.
Year one leniency
The ATO has acknowledged that this is a significant transition, and under PCG 2026/1 it is taking a risk-based approach during the first year, from 1 July 2026 to 30 June 2027.
Employers will fall into different risk zones depending on how they manage their super obligations during that first year:
- Low risk: Employers who genuinely tried to pay on time, corrected any errors promptly, and ended up with no final SG shortfalls.
- Medium risk: Employers who missed a payday deadline but cleared all SG shortfalls within 28 days of the end of the quarter.
- High risk: Employers with shortfalls still outstanding 28 days after the end of the quarter. These employers will get the ATO’s full attention.
This concession is a one-year arrangement only. From 1 July 2027 onwards, the ATO’s approach will be strict, and the safety net of “we tried our best” goes away.
What to do before 1 July 2026
The good news is there’s still time to get ready, but the work needs to start well before 30 June.
Start with your payroll and pay codes.
Make sure your software can process super on every pay run and send it through a SuperStream-compliant clearing house inside the 7 business day window. While you’re there, review your pay codes against the new Qualifying Earnings definition, especially if you pay allowances, bonuses or commissions.
If you use the SBSCH, plan your move.
Transitioning to a new clearing house, downloading historical payment and employee records, and getting comfortable with the new system all takes time. Don’t be the business trying to migrate the week before 30 June 2026.
The Small Business Superannuation Clearing House (SBSCH)
Plan your cash flow.
Paying super every pay run rather than every quarter changes your cash flow profile, particularly if you’ve quietly used the quarterly window as short-term working capital. Modelling this now is much easier than discovering the squeeze in real time. While you’re at it, take another look at any contractor arrangements where SG may apply.
Check your SMSF setup.
If your contributions flow into a Self-Managed Super Fund, make sure the fund has a valid Electronic Service Address (ESA) and that its annual return is up to date. An overdue return can cause the ATO to strip the fund’s regulated status, which makes it ineligible to receive contributions altogether.
How we can help
Payday Super touches payroll, cash flow, systems and compliance all at once, and how it lands in your business will depend on your size, your pay cycle and your current setup. Get in touch and we’ll work through what these changes mean for you, well before 1 July 2026.
References
- ATO, About Payday Super
- ATO, Payday Superannuation legislation
- ATO, Key superannuation rates and thresholds: Super guarantee
- ATO, PCG 2026/1
Disclaimer
The content provided in this article is for informational purposes only and does not constitute legal or financial advice. While we strive to ensure accuracy, we recommend that readers consult with an appropriate specialist for professional guidance specific to their individual circumstances. The information presented here may not cover all aspects of superannuation regulations or tax implications. It is essential to conduct further research and consider seeking personalised advice before making any decisions related to your business or your workers. Grenfell Murray Pty Ltd disclaims any liability arising from reliance on the information contained in this article. Readers should exercise due diligence and verify details independently.
