The 1 July 2026 start date for payday super will not provide adequate time for some digital service providers to implement the changes and transition all employers, the association has warned.

The Association of Digital Service Providers Australia and New Zealand (DSPANZ) is calling for an extension of time for the implementation of payday super, with payday super set to "fundamentally transform the superannuation guarantee contribution process".

In a recent submission, DSPANZ outlined that the 1 July 2026 commencement date is not achievable for all digital service providers to implement the current scope of changes and transition all employers.

"We recommend that Payday Super commences 2 years after the legislation passes to provide sufficient time for DSPs to develop, implement and test the required changes before beginning to transition employers," the association said.

"Without changing the commencement date, there will be less than 12 months to implement changes and transition all employers."

DSPANZ said while gateways and clearing houses were confident that they would be able to move quickly to support the new requirements, payroll software providers required more time.

"Payroll software providers will require additional time to implement and then support, educate and transition all employers," it said.

"There is an opportunity for the ATO to require gateways and clearing houses to be ready before the commencement date to support DSPs and super funds with their implementations."

DSPANZ said if the commencement date remains the same, then the government must reduce the scope of the reforms.

"If the commencement date for Payday Super remains as 1 July 2026, DSPANZ believes that moving to monthly SG contributions would enable the current processes and technology to continue to be used and is the most practical path to more frequent super payments within this timeframe," the association said.

"We would then advocate for further consultation across key stakeholders to implement technology reforms that can deliver on the governments Payday Super policy objectives and support the transition of gateways, clearing houses, super funds, payroll software providers and, most importantly, employers.

The association also stressed that data quality will be critical to the success of payday super.

"For Payday Super to succeed, we should design a system where it is easier for employers to get it right and where services are available that provide validated, accurate information when an employee is onboarded and before the first payroll occurs," it said.

It noted that while the government has allocated $400 million to the ATO for SG compliance and re-designing the SG charge, there is no funding for developing new services to support employers with access to information that will improve efficiency in processing and enable SG contributions to be processed by super funds the first time and every time.

"DSPANZ continues to call on the government to invest in upfront data services that will benefit all employers in meeting their SG obligations."

The association has also recommended that the government consider applying a grace period for the first 12 months after the commencement date to support employers transitioning to payday super.

"A grace period would ensure that employers are not heavily penalised for unintentional errors and mistakes during this period. While most employers will try to get things right, transitioning to a shorter contribution cycle and updated STP reporting will likely increase unintentional errors and mistakes," it said.

"With Payday Super intending to transition all employers simultaneously, there will be a hard cut-over process, adding further challenges to ensuring a smooth transition."

DSPANZ said many of its members were experienced in delivering large-scale changes that impact employers, such as SuperStream and STP, and supporting their customers through this process.

"When there are hard cut-overs from one process to another, grace periods support employers and help them to get things right."