Payday Super: Policy Design Released
As part of the 2023–2024 Federal Budget, the government proposed a “payday super” reform. A newly released government fact sheet sets out some key elements of the policy.
From 1 July 2026, instead of the current requirement to pay quarterly, superannuation guarantee (SG) contributions will need to be made on “payday”. This is the date an employer makes an ordinary time earnings (OTE) payment to an employee. When OTE is paid, there’ll be a new seven-calendar-day “due date” for the payment to arrive into an employee’s superannuation fund. Some limited exceptions will apply for small or irregular payments outside the usual pay cycle, and contributions for newly commencing employees.
The SG charge framework will be updated for the payday super environment, including larger penalties for employers who repeatedly do the wrong thing.
Contributions will automatically count towards the earliest possibly payday not yet assessed for SG charge and which still has an outstanding shortfall so employers no longer need to make an election or choose the period for which each late contribution should count.
Other changes include the following:
- The deadline for super funds to allocate or return contributions will reduce from 20 business days to three days.
- Employer reporting in Single Touch Payroll (STP) will include employees’ OTE and total super liability, ensuring correct identification of the SG.
- The ATO’s Small Business Superannuation Clearing House will be retired on 1 July 2026. The ATO will support small businesses in transitioning to suitable payroll software solutions.
- Revised choice of fund rules will apply to make it easier for employees to nominate their super fund when starting a new job.
- Advertising of super products during onboarding will be limited to MySuper products passing the most recent performance test, to protect employees from poor outcomes.
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.
