Today (1 July) marks the introduction of Payday Super, an initiative set to change the way super funds handle their contributions.
Payday Super is an Australian Government reform that requires employers to pay their employees’ Superannuation Guarantee (SG) contributions at the same time they pay their normal wages, rather than on a quarterly basis.
Australia’s superannuation industry welcomed the passage of the Treasury Laws Amendment (Payday Superannuation) Bill through the Senate last November, calling it one of the most significant reforms to boost retirement savings and tackle unpaid entitlements.
The Payday Super Regulations were formally made on 19 February 2026, detailing the rules to support Payday Super’s operation.
At the time, industry bodies and major funds signalled a strong readiness to work with government, employers and payroll providers to ensure compliance and smooth adoption ahead of the 2026 start date.
With Payday Super now in force, super guarantee contributions must now be made alongside salary and wages (weekly, fortnightly, or monthly) and must reach the employee’s super fund within seven business days of the pay date.
For new employees, or employees who have changed funds, there will be a longer timeframe of 20 business days to make their first payment.
For superannuation funds, they now have three business days to allocate or return contributions, a reduction from 20 days prior to 1 July. If the payment arrives without the right data, or the data can’t be matched to an employee, the contribution isn’t considered received and the fund will need to send the money back.
Employers must calculate super based on an employee’s qualifying earnings, which is a new term that brings together ordinary time earnings and other payments. Qualifying earnings include ordinary time earnings, all commissions, salary sacrifice contributions and other amounts that are currently included in an employee’s salary or wages for super guarantee.
The change means some businesses may also need to pay more super overall, such as for employees who receive variable or lump sum payments like a performance bonus or commission.
A super guarantee charge will apply from 1 July 2026 if amounts aren’t received by a super fund within seven business days after payday (unless longer applies, such as for new employees) which is assessed by the ATO and is calculated based on qualifying earnings.
To encourage early disclosure by employers, the super guarantee charge includes an amount to reflect the cost of enforcement known as the administrative uplift amount but this may be removed if no action has taken against the employer in the past or the employer lodges a voluntary disclosure statement.
Penalties are 25-50 per cent of the unpaid super guarantee charge, depending on any prior penalties.
According to the Australian Taxation Office (ATO), Payday Super does not change which employees receive super, the percentage used to calculate super guarantee contributions which remains at 12 per cent or the systems and platforms used to make payments. The only exception is for the Small Business Super Clearing House which closed in October 2025.
ASFA chief executive Mary Delahunty said linking super to an employee’s payday will help address unpaid contributions, with more than $5 billion in retirement savings withheld from workers each year.
“Payday Super is one of the most significant reforms to the superannuation system in decades, and it’s long overdue. Paying super with wages will make the system fairer, boost retirement balances, and ensure super is achieving its core objective.”
