Payday Super changes by ATO
What is Payday Super?
Payday Super is the modification that is made to how employers calculate and pay their employees their super guarantee. The ATO super guarantee reform has directed employers to make their super guarantee payments on the same day the employees receive their salary, effective from July 2026.
When was it introduced?
In May 2023, the government announced Payday Super reforms through the Superannuation Guarantee Charge Amendment Bill 2025 and the Treasury Laws Amendment (Payday Superannuation Bill). This reform requires employers to pay super guarantee contributions on payday, ensuring the contributions reach employees’ super funds within 7 business days.
According to the bill, this reform aims to strengthen the Australian Superannuation system and deliver a more refined retirement for the Australian workforce.
What are the key changes in the super guarantee payments?
Current scenario
- The super guarantee payments should be received by the super fund within 28 days of a quarter’s end, and this can be done monthly or quarterly. The deadlines for making super guarantee payments were 28th October, 28th January, 28th April, and 28th July.
- The super guarantee amount is estimated at 12% of ordinary time earnings (OTE).
- Single Touch Payroll (STP) is used for reporting either OTE or super liability.
- Penalties can go upto 200% of the ATO super guarantee charge, and this amount can be remitted partially or fully.
From July 1, 2026
- Super guarantee has to be paid to the employees’ super fund simultaneously, along with the qualifying earnings (QE), on the payday. The SG payments have to be received in 7 business days.
- Qualifying earnings include OTE, salary sacrifice contributions and any other payment that is included in employees’ salaries for SG.
- Both QE and super liability are reported through STP.
- Based on previous penalties, they are charged either 25% or 50% of the unpaid Super guarantee charge.
Does this change overload the accounting firms?
- The frequent Super Guarantee contributions will require frequent bank reconciliations, increased transaction processing, and high-volume work.
- Accounting firms need to be more vigilant on late contributions and notify their clients in case of reporting breaches.
How can outsourcing help?
Sundaram Business Services, with 25+ years of expertise in SMSF administration and audit, can efficiently manage the payday super changes and provide end-to-end support, freeing your resources to focus on high-value client-facing activities.
