Next step for payday super: legislation introduced to Parliament

The government’s payday super reforms have taken another step towards implementation with the introduction of legislation to Parliament. The new reforms will require employers to pay employee super contributions on payday. The reforms ensure employees receive super contributions more frequently and earlier, allowing those contributions to grow and compound over their working lives while reducing unpaid super.

The newly introduced legislation includes some changes from the earlier drafts released for consultation in March. The changes measure contribution time-frames in business days rather than calendar days and require employers to make contributions for new employees within 20 business days, instead of 21 calendar days. The additional time will also apply to contributions for existing employees who’ve changed to a new fund.

The legislation still needs to pass through both the House of Representatives and the Senate before it becomes law, but you shouldn’t wait to start planning.

Recognising that employers need time to deploy, test and embed changes in their payroll systems and business processes, the ATO has released a new draft Practical Compliance Guideline that outlines its proposed compliance approach for the first year of payday super (starting 1 July 2026). It plans to use a risk-based framework where employers will be categorised as at low risk, medium risk or high risk of not meeting their payday super obligations.

What’s next?

Start preparing now. Review your payroll systems and processes to ensure they are ready for payday super by 1 July 2026, assess whether more frequent super payments could affect your cash flow and take action if needed, and identify alternatives if you use the SBSCH, as it will close from 1 July 2026. Planning ahead will help you be compliant with the law and make a smooth transition.

Keep an eye on developments as the legislation progresses through Parliament and as the ATO finalises its compliance guideline. Changes could still be made before the reforms take effect.

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Important: Clients should not act solely on the basis of the material contained here. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We, therefore, recommend that our formal advice be sought before acting in any of the areas.