Payday Super – what you need to know
As of the 1st of July 2026, employers will be required to pay their employees’ super (12% of Qualifying Earnings (QE)) at the same time as their salary and wages.
‘Payday Super’ will move payment of super from the quarterly cycle that businesses are used to, and switch it to a process where employees’ super will be paid within seven days of their usual payment cycle – whether weekly, fortnightly or monthly.
What are Qualifying Earnings (QE)
QE is the new base for calculating super guarantee (SG) and includes:
Ordinary Time Earnings: Base pay, allowances, bonuses, commissions, paid leave.
Salary Sacrifice: Amounts sacrificed into super.
Other Wages: Payments currently counted as salary/wages for SG.
Exclusions: Overtime and reimbursements are generally not included.
Key Changes with Payday Super
Payment Frequency: Super is paid with each pay cycle (e.g., weekly, fortnightly) instead of quarterly.
Payment Deadline: Super must reach the employee’s fund within 7 business days of payday.
Reporting: Employers must report QE and SG liability through STP at each pay event (label Q for QE, L for liability).
Penalties: Increased interest and penalties for late or underpayment.
Extended Timeframes (Exceptions)
New Employees/New Funds: For the first contribution for a new employee, or when an existing employee switches to a new fund, the payment deadline is extended to 20 business days after the relevant pay date.
Out-of-cycle payments: For bonuses or special, non-regular pay, the super contribution is due within 7 business days of the next regular payday.
Overlapping Due Dates: If the 20-day extension for a new employee overlaps with a subsequent regular pay date, both payments are due on the later date.
Exceptional Circumstances: If the ATO determines a class of employers is affected by disasters (like floods), they may extend the deadline to 20 business days after the situation passes
Consequences of Late payment
SGC Trigger: Failing to meet the 7-day window triggers the Superannuation Guarantee Charge (SGC).
Penalties: Late payments can trigger penalties of 25%–50% of the shortfall, plus interest, which may not be remitted.
Interest: Daily compounding interest at the ATO’s general interest charge rate applies
Please note, once a SGC has been lodged, the Superannuation, interest and admin charges included are no longer considered a tax deduction by the ATO.
Software to assist with the transition
Make the transition as free of stress as possible by choosing the right systems and technology. Look for tools that handle payroll and super in one place, like Xero, MYOB and Employment Hero (formerly known as Keypay).
These software platforms helps small business owners automate super payments, stay compliant, and manage cash flow confidently, all within one platform.
For more information on how these individual platforms are assisting with these changes, please click on the logos.
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Thorntons tips for Compliance
Payday super will inevitably result in more admin hours for your business.
Automate: Move away from manual processes to payroll-integrated solutions.
Start Early: Familiarise yourself with how your chosen software is evolving with the new changes.
Cash Flow: Begin shifting from quarterly to monthly/fortnightly payments in early 2026 to test your cash flow.
Verify Details: Ensure employee super details are accurate to prevent returned payments.
Contact us: We have a team ready to assist you navigate these changes and we’re ready to help.
