Payday Super is finally here. Are you ready?

On 9 October 2025, the Federal Government introduced the Treasury Laws Amendment (Payday Superannuation) Bill 2025, which amends key parts of Australia's compulsory superannuation regime to implement the long-anticipated Payday Super reforms. The reforms, expected to commence on 1 July 2026, seek to align the payment of superannuation guarantee (SG) contributions with an employer's pay cycle rather than the current quarterly requirement.

The Bill follows the Treasury's exposure draft first released in March 2025, which outlined in detail the proposed changes to the frequency of SG contributions, the consequences for late or missed payments, and a redesigned penalty framework to encourage employers to make timely contributions. Many key design features are unchanged, but industry feedback has secured important modifications, most notably the conversion to business days and more practical fund allocation rules.

What has changed with superannuation guarantee payments?

• 7 business days, not calendar days – SG contributions must now be received by the superannuation fund within 7 business (rather than calendar) days of each QE ("qualifying earnings") payday.

• Late payment offsets for pre-1 July 2026 periods – for remuneration paid post-1 July 2026, late payment offsets will be automatically applied to the earliest outstanding QE day that has not yet been assessed for SGC without the need for an election. However, these offsets can no longer be allocated to pre-1 July 2026 periods. For pre-1 July 2026 remuneration, the existing election process remains available.

• Extended periods expressed in business days – the various extensions (for first time contributions, out of cycle payments and exceptional circumstances) convert to business day and cap out at 20 business days.

• Expanded high-income opt-out – the shortfall exemption certificate is broadened so that more multiple employer and high-income earners can avoid excess contributions.

• Faster fund allocation rules – superannuation funds will have 3 business days (rather than 20) to either allocate a contribution or to return it if it cannot be allocated.

• Enhanced reporting via Single Touch Payroll – each employer must disclose for every employee the QE amount and the associated SG liability. This will give the ATO real-time visibility over contributions.

What hasn't changed?

Many key features of the Payday Super reforms remain unchanged from the Treasury's exposure draft, including:

• Commencement remains 1 July 2026.

• The redesigned SGC charge, including:

  • Individual final SG shortfall (based on QE);

  • General interest charge;

  • Administrative uplift of 60% (reduced if the employer makes a voluntary disclosure); and

  • Choice of fund loadings, if applicable.

• Penalties for unpaid SGC, including an additional late payment penalties of 25% or 50% will apply if the assessed SGC is still outstanding 28 days after the ATO issues a notice to pay (with limited discretion to remit).

• The Small Business Superannuation Clearing House (SBSCH) will be retired from 1 July 2026 (from 1 October 2025, employers are unable to register as new SBSCH users as only existing users will have access until 1 July 2026).

Draft ATO Practical Compliance Guideline

The ATO has also released a draft Practical Compliance Guideline PCG 2025/D5 Payday Super - first year ATO compliance approach (PCG 2025/D5), detailing a risk-rated compliance approach for the implementation year (1 July 2026 to 1 July 2027).

• Low-risk: if the employer has attempted to make on-time contributions with no final shortfalls – no ATO review.
  
  Examples include where there is evidence the employer made reasonable attempts to correct any errors as soon as reasonably practicable.

• Medium-risk: if the employer has had timing issues resolved by 28 days after the end of the quarter – ATO review is possible.
  
  Examples include where the employer does pay sufficient superannuation but has failed to adjust the frequency of their contributions in line with the Payday Super reforms.

• High-risk: if the employer has shortfalls that remain 28 days after the end of the quarter – high compliance priority.
  
  Examples include scenarios which involve contributions being calculated incorrectly (and therefore insufficient contributions made), paid late, and remain unpaid after the required contribution deadline.

PCG 2025/D5 is open for consultation until 7 November 2025. Importantly, the draft guideline does not outline the Commissioner's compliance approach after 1 July 2027. It is expected that the ATO will adopt a firmer approach to compliance and enforcement activity once Payday Super is fully operational and employers have had sufficient time to familiarise themselves with the new rules. However, employers should not take the ATO's guidance to mean it can delay action until 1 July 2027. Employers who do not take steps to comply with the Payday Super reforms will still be at risk of ATO investigation.

Further, as superannuation is now regulated under the National Employment Standards in the Fair Work Act 2009 (Cth), employers who fail to comply with the reforms may also face potential scrutiny from the Fair Work Ombudsman, exposure to civil penalties and the risk of claims from employees.

Employers will benefit from taking proactive steps to be prepared for Payday Super which include:

• Ensuring appropriate upgrades are made to payroll systems to handle and process increased superannuation contribution frequency;

• Maintaining sufficient record-keeping practices to ensure relevant documentation such as superannuation standard choice forms and tax file number declarations is readily available to avoid any delays in contribution processing;

• Pay code reviews to ensure contributions are paid on correct entitlements; and

• Optimising budgets, cash flow strategies, and financial planning to facilitate contributions within 7 business days of payday.

Please contact us if you would like to discuss how the Payday Super reforms may impact your business.