August 29 2023

What the proposed new payday super rules mean for you

If you’re an employer, the upcoming payday super changes, proposed to commence from 1 July 2026, are expected to have an impact on how you pay super to your employees. Although this measure is not yet law, we're here to help you understand how these changes might affect your business.
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What is payday super?

Payday super is the requirement for employers to pay employees’ super contributions on payday rather than quarterly. It was announced by the Federal Government as part of the Federal Budget in May 2023.

Starting from 1 July 2026, employers will need to pay their employees' superannuation at the same time as their salary and wages.

Keep in mind that payday super is not yet law. Given the three-year lead time, employers will have some time to prepare for the new requirement before it comes into effect.

How will payday super impact employers?

If you’re an employer, the introduction of payday super could make it simpler to meet your super obligations. Paying super on the same day as your employees’ regular pay could potentially help:

  • lower the likelihood of missing super payments
  • reduce your business’s payroll liabilities
  • make your business’s payroll system more streamlined and manageable.

Additionally, moving to payday super could help your business avoid incurring the SG charge due to unpaid super. This charge, which is not tax deductible, can be a significant financial burden for employers.

While the requirement does not come into place until 2026, you can consider shifting to payday super ahead of time. This is up to you as an employer, but it could help you get ahead of any regulatory changes before they come into effect.

If your business already pays super with salary and wages, you might not need to make any changes.

Why is the Federal Government bringing in payday super?

Most employers do the right thing and follow the SG rules. However, some employers fail to meet their super obligations.

Unpaid super amounted to $3.4 billion in the 2019-20 financial year, according to ATO estimates. Payday super aims to make it easier for your employees to track the super contributions you make to their super fund. This is especially important for low-income workers and those relying on insecure work, many of whom are women. 

Government analysis found that under the proposed new rules, a 25-year-old worker on the median income who currently receives their super quarterly and wages fortnightly could be about $6,000 or 1.5% better off when they retire.   

The government will provide the ATO with additional resourcing to help it detect and address unpaid super cases sooner. The change may also mean the ATO can act earlier when an unpaid super complaint is lodged.   


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What are the current rules?

Currently, employers must pay super for eligible workers at least four times a year, on or before the quarterly SG payment due dates, shown below.

Quarter Period SG payment due date
1st 1 July – 30 September 28 October
2nd 1 October – 31 December 28 January
3rd 1 January – 31 March 28 April
4th 1 April – 30 June 28 July

An employer must pay an SG charge to the ATO if they fail to pay an eligible employee’s super in full, on time, and to the right super fund. The SG charge is costlier for an employer than the super contributions they are required to make, as it also includes interest and administration fees.

But not every workplace has the same practices. Some employers may pay super more frequently than what is legally required.

Learn more about your super-related responsibilities as an employer.

Want to learn more?