Payday Super everything SME’s need to know

From 1 July 2026, employers must pay superannuation contributions with every pay cycle instead of quarterly, with contributions to be paid to the relevant super fund within the required timeframe.

The Australian government has been clear that the Payday Super reforms are meant to reduce unpaid super and help workers see contributions landing sooner. This is partly because approximately $5.7 billion of super goes unpaid each year. More than 3 million Australians lost an average of $1,730 between 2022 and 2023, and just $1,730 of unpaid super can leave workers up to $30,000 poorer in retirement.

The Penalty Risk

Don't underestimate compliance. If super is not received by the employee's fund within 7 business days of payday, the Super Guarantee Charge (SGC) applies automatically. The updated Super Guarantee framework includes provisions that mean employers who pay super late will pay daily compounding interest, an administrative charge, and extra penalties if an assessed amount is not paid within 28 days. The ATO has real-time visibility via STP which means small delays will be noticed.

Here is your checklist to make it easy

Switch your clearing house (urgent as it’s already due)

Businesses that still use the ATO Small Business Superannuation Clearing House needed to move to a different provider. The SBSCH is no longer available from 1 July 2026. If you haven't done this yet, act immediately.

Update or upgrade your payroll software

From 1 July 2026, employers must report both qualifying earnings and super liability through Single Touch Payroll. Not all software is currently set up for this automatically. Check with your provider to confirm readiness.

Clean up your employee data

Missing super fund details, incorrect member numbers, and unverified TFNs will cause contributions to be rejected. Rejected payments restart your 7-business-day clock. It’s really important to get this right upfront.

Have a good look at your cash flow

For a business paying $15,000 quarterly in super, fortnightly payments mean paying approximately $2,300 every two weeks instead of $15,000 every three months. While the total annual super obligation remains the same, the challenge is losing the ability to hold onto those funds for up to three months before payment.

Automate everything

Use payroll software that can calculate super contributions automatically — this reduces errors and saves time. The best tools handle payroll and super in one place, automating the submission through SuperStream with every pay run.

Sync with your bookkeeper or accountant

Have what we would call a ‘Super Transition Meeting’. Ask your bookkeeper to review your current payroll settings and help you quickly switch to a payment-cycle-aligned super, rather than waiting for the last minute.

Review contractor arrangements

Contractors are generally exempt unless classified as eligible employees. You should review contracts and update reporting to stay compliant.

Communicate with your team

Let employees know when super is paid and how it's calculated. Transparency builds trust and helps employees spot any issues early.

Important things to remember

For small business owners, this reform represents both a challenge and an opportunity. It means rethinking payroll processes and preparing for more frequent cash outflows. It also offers a chance to modernise your systems and give employees greater confidence in their retirement savings.

If you have any questions regarding payday super please reach out to me paul@congdonfuzi.com.au