The Treasury Laws Amendment (Payday Superannuation) Bill 2025 and the Superannuation Guarantee Charge Amendment Bill 2025 (together, Payday Super) were introduced into Parliament on 9 October 2025. Together these bills seek to amend the Superannuation Guarantee Charge Act 1992 (SGC Act) and the Superannuation Guarantee (Administration) Act 1992 (SGA Act) to increase the frequency of the Superannuation Guarantee (SG) contributions in respect of ‘qualifying earnings days’ (QE days). If passed, Payday Super will commence from 1 July 2026.
Why the changes?
The Payday Super reforms align the payment of SG contributions with the payment of relevant earnings (instead of the current quarterly system) for an employer to avoid liability to the SG charge (SGC). Issues raised by industry with the current system include:
- Unpaid/underpayment of super (the ‘SG Tax Gap’) – the persistent problem of employers not meeting their SG obligations.
- Loss of growth – employees are missing out on potential investment returns to fund their retirement where superannuation is unpaid/underpaid.
- Mismatched payment cycles – different wage cycles (weekly, fortnightly or monthly) compared with superannuation cycles (quarterly) are adding administrative complexity to payroll functions and carrying high superannuation liabilities on the books.
- Compliance delays – the mismatch of payment cycles delays the identification of non-compliance.
What are the changes?
Broadly, the main features of Payday Super include:
- Introducing the concept of ‘qualifying earnings’ (QE) – includes ordinary time earnings, salary sacrificed superannuation contributions and other amounts currently included in an employee’s salary and wages for SG.
- Changes to the timing of making contributions – employers must ensure superannuation contributions are received by an employee’s superannuation fund within 7 days from the day on which wages are paid. Extended timeframes may be available in certain circumstances including for new employees.
- Calculation of SG shortfall – SG shortfalls will be measured daily.
- Calculation of the SGC – will be the SG shortfall adjusted for interest, notional earnings, fund loading and an administrative uplift amount.
- Penalties – GIC will accrue on the entire SGC amount not on individual SG shortfall amounts. If SGC is unpaid 28 days after it is assessed, the ATO will issue a notice to pay. A late payment penalty will apply if the notice to pay remains outstanding for 28 days.
- Reporting – QE and the associated employer superannuation contribution will be reported via Single Touch Payroll (STP).
- Clearing Houses – The Small Business Superannuation Clearing House (SBSCH) will be retired from 1 July 2026 as it will not be fit-for-purpose to operate alongside this new law.
The Payday Super reforms were based upon extensive industry consultation and aligning the payment dates maximises the time retirement savings can be invested. This is a positive change towards strengthening Australia’s superannuation system and ensures non-compliance is identified sooner.
ATO Compliance
The Australian Taxation Office (ATO) has also released practical compliance guideline PCG 2025/D5 Payday Super – first year ATO compliance approach to outline how the ATO intends to monitor compliance for the 30 June 2027 income year.
Employers need to ensure that they are paying the minimum amount of SG contributions for their employees to avoid liability to the SG charge including aligning their payment frequency with Payday Super requirements. The ATO will apply compliance resources to areas of highest risk and have clearly stated:
- where an employer attempts to pay the minimum amount of SG contributions for all their employees in line with Payday Super but the payment reaches the employees' super fund late (for example, due to contributions being rejected by a super fund) the risk level for these cases will be in the lower risk zone provided the employer corrects the error as soon as is reasonably practicable; and
- where an employer continues to pay the minimum amount of SG contributions for all of their employees by the quarterly due dates that applied prior to 1 July 2026, with no attempt to pay more regularly, will not fall into a low-risk zone and compliance resources may be applied.
Employers may move between risk zones during the first year. If the employer moves into either the medium or high-risk zones in respect of certain QE days, the ATO may allocate compliance resources to review those medium/high risk QE days. Please note, PCG 2025/D5 will have no impact on how the Commissioner may view risk or allocate compliance resources for QE days on or after 1 July 2027.
What now?
Tackling Payday Super is fast becoming the most important practical issue for employers this financial year. Get ready now and:
- Understand the changes – evaluate how the changes will apply to your business and consider the administrative impact of this change if your pay cycles are on a weekly or fortnightly basis as well as how SG shortfalls and the SG charge are calculated.
- Review your payroll processes and accounting systems – check your software will support payday-linked SG payments and real-time reporting through STP. Map out your payroll control and authorisation processes. Remember, superannuation contributions must be received by the employee’s superannuation fund within the new timeframes.
- Cashflow – Forecast the impact more frequent superannuation payments are going to have on your cash flow and plan early. Consider whether there are specific times in the year where liquidity may be an issue and ensure a short-term funding facility is accessible.
- Training – those in charge of finance teams and payroll functions will need to ensure these changes are understood but also how to handle inevitable corrections or late payments.
- Communication – let your people know your finance and payroll functions are working on the Payday Super changes. Check that your clearing house or default fund can handle increased transaction frequency and will provide receipt confirmations quickly.
- Test run – once you understand the changes, do a test run. Check the timing between the payment to receipt by the superannuation fund. Check the accuracy of the reporting and whether your systems and controls worked well. Reflect, refine and try again!
Act now!
There are no rules about starting early so act now to allow adequate time for your organisation to prepare for Payday Super. If you need help undertaking a readiness assessment, contact Moore Australia today.