ATO Warns Employers to Prepare Now as Major “Payday Super” Changes Approach

ByEditorial Team

Millions of Australian workers and employers are being urged to prepare for a major overhaul of the superannuation system. Starting July 1, 2026, new laws require superannuation guarantee (SG) contributions to be paid at the same time as salary and wages.

The Australian Taxation Office (ATO) has dubbed this the “Payday Super” reform, marking the biggest change to the system since the 1990s.

Under the new legislation, which received Royal Assent in late 2025, employers must ensure super is received by the employee’s fund within seven business days of payday.

Australian money aud with calculator on desk (Image: Alfexe)

Reform Aims to Reduce Unpaid Super

The shift from quarterly to “on-payday” contributions is designed to tackle the estimated $5 billion annual gap in unpaid super. ATO Deputy Commissioner Emma Rosenzweig noted that many businesses are already ahead of the curve: “Up to 45 per cent of employers are already paying super more frequently than quarterly. You don’t need to wait until July to start.”

Recent research by MLC and McCrindle reveals a significant awareness gap:

  • 80% of Australians are unaware of the Payday Super reform.
  • 85% do not know the July 1, 2026, start date.
  • 55% of employers admit they are not confident their business is ready.

Key Changes: “Qualifying Earnings” and Penalties

The reform introduces a new calculation base called Qualifying Earnings (QE), which replaces the narrower “Ordinary Time Earnings” (OTE).

QE includes salary sacrifice amounts and other payments previously excluded from the SG base, ensuring the 12% contribution rate is applied more broadly.

New Compliance Framework:

Interest: Daily compounding interest (GIC rate) will replace the fixed 10% penalty for late payments.

Tax Deductibility: In a major shift, the Superannuation Guarantee Charge (SGC) will become tax-deductible for employers from July 1, 2026.

Grace Period: The ATO has confirmed that while penalties exist, they will prioritize high-risk offenders in the first year, providing a “supportive compliance” window for those making genuine mistakes.

System Milestone: Clearing House Closure

A critical deadline for small businesses is the permanent closure of the ATO Small Business Superannuation Clearing House (SBSCH) on June 30, 2026.

Final Deadline: Current users must submit final instructions and download all transaction records by 11:59 pm AEST on June 30.

Next Steps: Businesses must transition to a payroll-integrated solution or a private clearing house before July 1.

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