A significant change to Australia’s superannuation system will take effect from 1 July 2026. Under the new Payday Super rules, employers must pay superannuation at the same time they pay employee wages, replacing the current quarterly payment system.
At the same time, the Australian Taxation Office Small Business Superannuation Clearing House will close from 1 July 2026, meaning businesses using the service will need to transition to another SuperStream-compliant provider.
Preparing early will help ensure a smooth transition and avoid disruptions when the new system takes effect.
What this means for businesses
While the reform is designed to improve retirement outcomes for employees, it will require many employers to review their payroll processes and systems.
Key areas that may be impacted include:
- Cash flow management – super will be paid more frequently instead of quarterly
- Payroll systems and approvals – tighter processing timeframes will apply
- Payroll coding and calculations – the new rules introduce the concept of Qualifying Earnings
Key changes to know
- Super contributions must reach employees’ super funds within seven business days of each payday. There is additional time (up to 20 business days) for new employees.
- Superannuation will be calculated based on Qualifying Earnings (QE). This is a new definition of wages/earnings used to calculate super contributions under the new system.
- For high income earners, the maximum contribution base (MCB) will be calculated on an annual basis, instead of quarterly.
- Super guarantee charge (SGC) for late superannuation payments, will apply when super payments aren’t received by a super fund within 7 business days of payday. The SGC amount will include interest and an administrative uplift which can be as high as 60% of the SG shortfall. Additional SGC late payment penalties of 25% or 50% of the unpaid SGC can also apply.
What businesses should do now
Although the rules begin in July 2026, preparation should start early. Businesses should consider:
- Reviewing payroll systems and software capability
- Confirming clearing house arrangements
- Testing payroll processing timelines
- Assessing the potential cash flow impact
Next steps
We are assisting clients to prepare for Payday Super by:
- Reviewing payroll systems and pay codes
- Checking super calculations under the new rules
- Assisting with clearing house transitions
- Testing payroll processes before implementation
Nexia can also undertake a comprehensive payroll system review, to identify risks and help ensure your business is ready for Payday Super.
If you would like to discuss how these changes may affect your business, please contact your Nexia advisor.
