Payday Superannuation Changes 2026: What Employers Must Know
Read Time: 4 mins
Payday superannuation is a new rule, that starts on 1 July 2026. It will require employers to pay employees’ super contributions at the same time as each payday, rather than quarterly.
This major change means your business will need to update how and when you pay super and if you’re a small to medium now’s the time to start preparing so that you are fully compliant when the 1 July 2026 rolls around.
Why Is the Government Changing Superannuation Payment Rules?
The Australian Government’s goal is to reduce Australia’s unpaid super problem, improve transparency, and help employees grow their retirement savings sooner.
According to Treasury (2024), about $5 billion in super goes unpaid annually. Under the new system, employees will see contributions hit their fund more frequently, making it easier to spot non-compliance. For employers, payday super means tighter timelines but a smoother overall process once systems are in place.
When Does Payday Super Start and Who Does It Affect?
Payday superannuation starts from 1 July 2026 and applies to all employers who pay Super Guarantee (SG).
There are no exemptions based on business size. Whether you’re paying one receptionist or 50 tradies across sites, you must comply. This reform is a mandatory change affecting everyone who employs staff.
How Will Payday Super Work for Employers?
You must ensure super is received by your employees’ super funds within 7 days of each payday.
Here’s what that means in practice:
Super Guarantee (SG) (12% from July 2025) must be paid alongside your regular pay runs
Contributions must be in the employee’s fund within 7 business days
Reporting through Single Touch Payroll (STP) must include SG liability per pay
Limited grace periods apply for new starters or irregular bonuses
The ATO will use STP and fund data to track compliance in almost real-time
This is a shift from the current quarterly due date. You’ll need to align super payments with your payroll process.
“Payday superannuation is a new rule starting 1 July 2026 that requires all Australian employers to pay super contributions within 7 days of each payday, instead of quarterly.”
How Can Small Businesses Prepare for Payday Super in 2025?
Start upgrading systems, reviewing cash flow, and integrating super into your payroll process before the 1 July 2026.
Here’s a checklist to help:
Update Payroll Software: Platforms like Xero offer Auto Super features to automate per-pay-run super payments.
Plan for Cash Flow: Budget for weekly/fortnightly/monthly super outflows instead of quarterly lumps.
Test Early: Trial per-pay-run super payments ahead of 2026 to iron out issues. Clean dates to change over to Payday Super are 1 January 2026 or 1 April 2026.
Get help if you are unsure on anything or need assistance setting change of Payroll Software.
“To prepare for payday super, small businesses should update payroll systems, review cash flow, collect employee super details, and start trialling more frequent payments in 2025.”
How Does Xero Support Payday Super?
Xero makes it easier to meet payday super obligations by integrating Auto Super into its payroll system.
Key features include:
Auto calculation of SG with each pay run
Direct batch payments from Xero to super funds
Reminders and tracking to avoid missed deadlines
Employee access to view paid super via Xero Me
Integration with STP reporting
If you’re currently using the SBSCH, in our opinion, Xero is one of the simplest alternatives to transition to before the 2026 cut-off.
What Happens If You Don’t Comply with Payday Super?
Employers who fail to meet their superannuation obligations face tougher penalties. Missed or late payments will trigger the Super Guarantee Charge (SGC), which includes penalties and interest. If the Superannuation Guarantee Charge (SGC) remains unpaid 28 days after assessment, penalties of up to 50% of the outstanding amount may apply. Continued non-payment can even result in wage theft prosecution under current laws.The ATO will have near real-time visibility, so detection will be swift.
Penalties include:
Additional 50% penalty if ATO directions are ignored.
SG shortfall (the unpaid super amount)
Daily compounding interest. Currently at the rate of 11.36% annually
Up to 60% administrative penalty
Possible loss of tax deduction
“Missing super deadlines under payday super will trigger the Super Guarantee Charge – including interest, up to 60% penalties, and potential loss of tax deductions.”
How Will Payday Super Affect Industries Like Construction, Medical, Real Estate and Transport?
Each industry faces unique challenges, particularly around cash flow, irregular work patterns, and commission/bonus structures.
Construction: Frequent insolvencies and subcontractors increase complexity. Weekly pay runs mean weekly super. Automate where possible.
Transport: Casual drivers and fuel price fluctuations require tight cash planning. Use STP-integrated software.
Medical: Mix of contractors and employees requires careful classification. Medicare cash lags need buffer planning.
Real Estate: Large, irregular commissions need proper SG tracking and annual cap management.
SMEs in these sectors should consider engaging bookkeepers or payroll specialists to streamline compliance.
FAQs about Payday Superannuation (2025–2026)
What is payday superannuation? A new rule requiring employers to pay super within 7 days of each payday (starting 1 July 2026).
Does it apply to small businesses? Yes, all businesses with SG obligations must comply.
What software can help? We recommend using Xero. Other accounting software such as MYOB, QuickBooks and others will support payday super. Xero’s Auto Super is widely used.
Is the ATO Small Business Super Clearing House shutting down? Yes. SBSCH will close 30 June 2026. No new users can join after 1 Oct 2025.
What are the penalties for late super? Unpaid super attracts interest, penalties up to 60%, and is not tax-deductible.
Can I delay paying super on irregular bonuses or commissions? Yes, these can be paid with the next regular pay cycle.
Is there a grace period for new employees? Yes, you have 14 extra days to pay super on their first pay.
Conclusion
Payday super is coming. The smartest move you can make in 2025 is to act like it’s already here.
Get your payroll systems up to scratch. Use software like Xero to automate payments. And start paying super more frequently now – your business and your employees will benefit.
