SBSCH Closure: What Employers Paying Super Must Do

If your business uses the Australian Tax Office’s (ATO) Small Business Superannuation Clearing House (SBSCH) to pay employee super or if your employees have SMSFs and you handle contributions for them, this change will affect how you manage payroll and compliance.

The SBSCH has been a simple, free way for small employers to pay multiple super funds in one go. From the government’s perspective, the system has served its purpose but it doesn’t fit the new “payday super” world.

Here’s a practical guide to what’s changing, what it means for employers who pay employee super, and how Wardle Partners Accountants & Advisors suggests you get ready.

SBSCH Facts You Must Know (So You Can Stop Worrying and Start Planning)

• The ATO will close the SBSCH on 1 July 2026. 
• New registrations for the SBSCH are no longer accepted, effective from 1 October 2025. Only existing users retain access until the system winds down. 
• The closure is part of the Payday Super reforms, which require employers to pay super at the same time as wages (that’s what’s driving the timing and operational change). 
• The SBSCH is used by more than 200,000 small businesses, so this is a widespread transition not a niche admin tweak.
• ATO requires super contributions to reach your employee’s fund by the due date not just be sent. Paying through SBSCH counts as on time only if the payment is successfully processed. If it fails or is delayed due to incorrect details or insufficient funds, it’s still considered late and will result in penalties and interest charges. 
• From 1 July 2026, under Payday Super, contributions must be paid each pay cycle so even short delays could result in penalties. 
• If you handle employee contributions, these dates and the payday timing rules must be baked into your payroll process.

Why SBSCH Closure Matters For Employers Who Pay Employee’s Super

Previously, taxing unrealised gains meant super members could owe tax on assets that had increased in paper Businesses still have the same Superannuation Guarantee obligations; you must pay the contribution and ensure it arrives in the nominated super account within the required timeframes. Under Payday Super, the expectation shifts from quarterly, to per-pay-run payment due dates, which affects:

Timing certainty

Funds must receive contributions in line with pay runs, which in practical terms means you need reliable banking and clearing processes to ensure employee contributions hit their super accounts on time.

Data integrity

Super funds are particularly sensitive to member details and bank account details; mistakes are harder to unwind. You’ll need clean, validated employee/member data.

Administration and cost

SBSCH was free. Most replacement options (commercial clearing houses, payroll software, payroll bureaus) will have fees. Budget for this change.

If you’ve relied on the ATO’s free clearing house to keep things simple, you’ll likely need to adopt a paid or integrated solution that handles payments at each pay run and produces clear evidence the payment was made to the Super Fund, including Self Managed Super Funds.

Practical Options for Paying Super Once the SBSCH Is Gone

There isn’t a single “right” solution, as it depends on your number of staff, payroll frequency, existing software and whether payroll is outsourced. Here are the main routes employers choose:

• Use payroll software with integrated super payments.

Packages such as Xero and others can generate per-pay-run super payments and remit them directly. If you already use one of these, integration is the easiest route.

• Switch to a commercial clearing house.

Private clearing houses process multiple super payments for a fee and are typically built to work with payday super timing.

• Outsource your payroll.

There are external service providers that will manage timing, data and lodgement for a fee.

For employers paying super, the best approach often combines software such as Lightning Payroll, that validates SMSF bank details and member TFNs, together with a provider that guarantees settlement timing. That reduces the risk of delayed receipts and the administrative friction of chasing failed payments.

A Practical Transition Checklist — What to Do and When

1. Confirm whether you currently use the SBSCH. Check ATO online services / business portal access. If you do, note which staff and pay-runs rely on it.
2. Note the deadlines. New registrations stop 1 October 2025; SBSCH closes 1 July 2026. Plan to be migrated well before June 2026.
3. Audit your payroll and SMSF data. Verify member names, TFNs and bank account details for each employee with an SMSF — correct data reduces failed payments.
4. Review your payroll software. Can it pay super per pay run and produce evidence of fund receipts? If yes, test it; if no, get quotes.
5. Get quotes from clearing houses and external service providers if required. Ask about fees, settlement timing, reporting, and how they validate SMSF details.
6. Run a cash-flow simulation. Paying super with each pay run may change your short-term cash needs. Model the impact.
7. Do a live test run. Before June 2026, process one pay run through your chosen solution and confirm that employee super funds receive the contributions and that the ATO records the payments as being made.
8. Document procedures and train staff when necessary. Update your payroll manual to include new cut-offs, bank processes and contingency steps for failed payments.
9. Plan for fallback. If a payment fails, you’ll need documented evidence of timely action to avoid penalties — keep emails, bank statements and lodgement logs.

Common Pitfalls Employers Should Avoid

• Waiting until the last minute. With hundreds of thousands affected, providers will be busy and support could be limited.
• Assuming bank transfers are instantaneous. Settlement timing matters under payday super, especially around weekends and public holidays.
• Ignoring data quality. Incorrect Tax File Numbers or account details for SMSFs create rework and delays.
• Underestimating fees. The SBSCH was free — most replacements are not. Factor ongoing costs into your budget.

Conclusion

The SBSCH closure marks a significant shift in how small businesses will manage employee super payments, particularly for those contributing to SMSFs. To stay compliant and avoid disruption, it’s essential to plan ahead, confirm your employee and fund details, choose compliant payment solutions, test your new process, and factor in any provider fees.

Taking these simple steps now will help you avoid last-minute issues and ensure your employees’ super is paid correctly and on time.

Ensure your employees’ super is paid correctly and on time. Speak with Wardle Partners Accountants & Advisors today if you want more information or would like our office to assist with any of the above.

Top Questions Around Paying Employee Super

1. When exactly does the SBSCH close and when do registrations stop? 
New registrations will not be accepted from 1 October 2025, and the SBSCH will be closed on 1 July 2026. Existing users can access the service until it shuts down. 

2. Will Payday Super change how quickly super must reach a super fund? 
Yes. Payday Super requires employers to pay super in line with pay runs, and there are tighter expectations on when funds must be received by the super fund. That means you need reliable, per-pay-run settlement. 

3. If my employee has an SMSF, can I still pay their super directly to their fund’s bank account? 
Yes — you can pay directly to a SMSF’s nominated account, but you must ensure the payment includes the required data and arrives within the required timeframe. Using integrated payroll or a clearing house that validates details reduces risk. 

4. How many businesses are affected by this change? 
Estimates place the number of small businesses using the SBSCH at more than 200,000, so this transition is extensive. Plan ahead to avoid being caught out. 

5. Will replacing the SBSCH be more expensive? 
Possibly. The SBSCH is free; many alternatives (commercial clearing houses, payroll software subscriptions or bureau services) charge fees. Budget for ongoing costs and compare total cost of ownership. 

6. What should I do first this week? 
Check whether you use the SBSCH via your ATO business portal, audit employee super details (TFNs and bank accounts), and start shortlisting payroll software or clearing houses that pay per pay run. If you want, Wardle Partners Accountants & Advisors can run the initial audit for you. 

References

• Australian Tax Office – Small Business Superannuation Clearing House
• Australian Tax Office – Payday Super