Small businesses are scrambling to prepare for Payday Super reforms, with industry fund Cbus Super warning employers still have questions about compliance just six weeks before the changes take effect.
From 1 July, employers will be required to pay superannuation contributions at the same time as ordinary wages under the Federal Government’s Payday Super reforms, replacing the current quarterly payment framework.
Cbus said thousands of employers had attended its webinar series in recent months seeking practical guidance on how to prepare for the new rules.
Chief member officer, Tom Garcia, said the changes would benefit workers but could create operational challenges for businesses adjusting payroll systems and cashflow management.
“The introduction of Payday Super is going to be slightly different for each business, depending on things like how they manage cashflows. We’re doing everything we can to help them prepare,” he said.
“We’ve had thousands attend our series of webinars on the topic, and we’re hearing the same themes again and again.
“Most employers want clarity, certainty and reassurance [that] they can stay compliant without overhauling everything they do today.”
Questions raised during the webinars included how the seven-day rule would apply, whether employers could continue using existing payroll systems, how rejected payments would be treated and which financial year June or July payments would count towards.
Garcia said employers remained concerned about the potential administrative burden associated with the reforms and were looking for practical guidance on managing payroll processes.
“What we’ve learned from the thousands who’ve attended our webinars is that employers are wary of any additional administrative burden from this change,” he said.
“It’s clear that employers are looking for practical advice for the situations that could trip them up — for example, what happens if the person who processes payroll is on leave. We’re doing our part to help them feel prepared for this major change.”
He urged employers to begin testing payday-aligned payroll processes ahead of the reforms taking effect.
“Employers can take some steps to ensure they’re ready for July 1 – visit our Payday Super hub, plan your payroll processes and policies, pilot some payday-aligned payments, and prepare your staff by running some test payrolls,” Garcia said.
Cbus said it had long advocated for Payday Super and had recovered more than $1 billion in unpaid super on behalf of members over the past decade. The fund recovered close to $200 million in the last financial year alone, including for more than 29,000 members under the age of 35.
Under the reforms, employers that miss or underpay super contributions will face updated penalties and charges from the Australian Taxation Office, including interest on shortfalls and additional penalties for repeat offenders.
“I’d encourage any businesses still asking questions to jump onto our Payday Super landing page, give us a call or sign up for our final webinar in early June,” Garcia said. “It’s in everyone’s interests to get this transition right.”
