CPA Australia urges the ATO to extend compliance support for small businesses facing major system changes ahead of Payday Super reforms.
CPA Australia has urged the Australian Taxation Office (ATO) to extend compliance support for employers ahead of the introduction of Payday Super, warning that the scale of change required across payroll, finance and superannuation systems will create significant challenges for small businesses.
In a joint submission with other leading professional bodies, CPA Australia has backed the ATO’s risk-based compliance approach for the first year of the reforms but recommends that transitional relief be extended to 30 June 2028 to give employers, particularly small businesses, more time to adapt.
From 1 July 2026, employers will be required to pay superannuation contributions at the same time as salary and wages. The ATO’s draft Practical Compliance Guideline outlines how employer compliance will be assessed during the first year, categorising employers into low, medium or high-risk zones.
Richard Webb, superannuation lead at CPA Australia, said the reforms represent a major operational shift for businesses and their advisers.
“Payday Super is a positive step for workers, but the transition must be fair and practical for employers,” Webb said. “Many businesses will need to overhaul payroll systems, change clearing houses, and retrain staff – all within a short timeframe. We’re calling for a longer compliance window and clearer guidance to help employers get it right.”
CPA Australia’s submission highlights the need for a 24-month transitional compliance period to 30 June 2028, clearer definitions of key terms such as “reasonably practicable” and clarification of the role of Voluntary Disclosure Statements, ATO-led nudge messaging to help employers monitor superannuation guarantee payment timing and system performance, and clearer relief for employers affected by fund mergers, incorrectly rejected contributions and third-party delays.
Webb added that small businesses are particularly vulnerable.
“Around 250,000 employers currently use the Small Business Superannuation Clearing House, which won’t be compatible with Payday Super. These businesses will need to find new providers and ensure their systems are compliant – that’s a big ask in a short time,” he said.
CPA Australia has also supported aligning the reforms with the government’s “tell-us-once” principle to reduce duplication and administrative burden.
“Employers shouldn’t be penalised for delays caused by systems outside their control,” Webb said. “We want to see a compliance framework that supports genuine effort and collaboration, not one that punishes complexity.”
The submission to the ATO was produced in partnership with the Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, Institute of Certified Bookkeepers, Institute of Public Accountants, SMSF Association and The Tax Institute.
