Payday Super kicks off soon – here’s how to stay compliant

The imminent commencement of Payday Super laws represents one of the most significant reforms to Australia’s superannuation guarantee (SG) frameworks in recent history.

From 1 July 2026, employee SG contributions must be received by their chosen and compliant superannuation funds within seven business days of payment, rather than on a quarterly basis.

Initially announced in May 2023 as part of the 2024 federal budget, Payday Super is designed to reduce unpaid SG contributions from employers and improve the ATO’s detection ability. Following Treasury consultation, exposure draft legislation was released in March 2025 and received royal assent in November 2025.

The legislative package under the Treasury Laws Amendment (Payday Superannuation) Act 2025 also introduces new terminology.

These changes bring important considerations for accountants and tax advisers supporting their clients to remain compliant and manage cash flow under the new rules. Here’s what you need to know.

Payday Super requirements

Under Payday Super, the day on which an employee’s wages are paid is now referred to as the qualifying earnings (QE) day.

If the required SG payment is not received within seven business days of the QE day, the employer will have an ‘individual base SG shortfall’. The employer may make a voluntary disclosure to pay the gap plus interest.

Any remaining amount will be considered an ‘individual final SG shortfall’ to which the Commissioner may issue a notice and/or make an assessment requiring the amount to be paid, with penalties and administration uplifts arising, subject to the circumstances.

Under these changes, QE payments must be reported to the ATO under the Single Touch Payroll (STP) Phase 2 reporting framework.

Additionally, the maximum contribution base (MCB) will now be applied as an annual limit, rather than a quarterly one. It will be calculated using the annual concessional contributions cap.

This change redefines how MCB caps impact higher-income earners, including those employees who transfer between employers during the year. Employers should consider processes for engaging new workers and review contractual terms.

The ATO’s compliance approach

On 28 January 2026, the ATO released Practical Compliance Guideline PCG 2026/1, replacing draft PCG 2025/D5. This guideline explains the ATO’s compliance approach for Payday Super during its first year of operation, specifically for employer SG shortfalls occurring from 1 July 2026 to 30 June 2027.

PCG 2026/1 introduces a transitional, risk-based approach for this period. The guideline does not alter employers’ legal obligations and instead only clarifies how and when the ATO will apply its compliance resources.

Employers will be classified as low, medium, or high risk. For example, if an employer tries to make all required SG contributions on a QE day and some payments are missed but quickly rectified, the ATO will treat them as low risk.

Alternatively, an employer will be deemed medium risk when individual and final SG shortfalls are nil 28 days after the end of the quarter in which the QE were paid. High-risk employers are those whose SG shortfalls exceed nil after 28 days in the QE quarter.

Tips for accountants and advisers

Non-compliance with SG and employer obligations is taken seriously by regulators and can have serious implications for reputation and employee relations. Compliance with the new timing requirements under Payday Super is an important component in remaining compliant.

The increased frequency with which SG contributions must be made may have cash flow implications for some employers. Cash flow forecasting should be undertaken to assess impacts and support appropriate planning.

Most payroll systems will be updated late in FY26 ahead of the 1 July 2026 start date. New STP2 fields will be required to be reported to the ATO and reviews of wage codes may be required ahead of this time, as well as catering for any payroll system testing required.

Payday Super and SG obligations do not just apply to common law employees – workers who meet the extended definition of employee such as individuals engaged under a contract wholly or partly for their labour, may also be subject to SG. Employers may need to review processes for calculating and paying SG for these contractors in line with QE days.

While there is a short timeline for the activities required ahead of 1 July 2026, such as systems implementation, process changes and wage code mapping, Payday Super does present an ongoing obligation. Employers will need to implement processes to continually monitor, detect and rectify shortfalls, ensuring employees are paid the correct amount of superannuation on time

Also remember that payments to contractors who are subject to SG must be made in line with each payday, ensuring super is paid according to the new requirements.

Satisfying employer obligations, including SG, is critical. While simple in concept, the new Payday Super obligations create practical challenges for many employers and must be navigated with care.

Rhys Cormick is a partner in global employer services at Deloitte Australia.