Payday super is due to begin in July 2026. Is your payroll process ready? We’ve outlined the key requirements and how payday super could impact your small business.
Back in 2023, the Australian Government announced that from 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages.
Payday super will move payment of super from the quarterly cycle that businesses are used to and switch it to a process where employees’ super will be paid within seven days of their usual payment cycle, whether weekly, fortnightly or monthly.
But why the change? And what are the potential effects of moving to payday super?
Impact of payday super for your employees
From 1 July 2026, as an employer, you will be required to pay your employees’ super at the same time as their salary and wages.
This change will make it easier for employees to keep track of their super and will boost their overall super fund at retirement. It will also remove the problem of casual workers habitually missing out on quarterly super payments under the current system.
By switching to payday super, a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6,000, or 1.5 per cent, better off at retirement.
Impact of payday super for your business
Payday super legislation has now been passed, meaning Australian employers must prepare their systems and processes ahead of the 1 July 2026 start date.
Moving to a super system where employer contributions are made in line with the employee’s regular payment cycle may not seem like a huge shift. However, moving away from the current quarterly system could have a significant effect on your administration time and cash flow.
Let’s look at the potential downsides of payday super for your business.
An increased administrative burden
Paying superannuation with each pay cycle, rather than quarterly, will increase the frequency of your super payments. The added frequency will increase your administrative and payroll workload, stretching the already limited resources of many small businesses.
Unrealistic seven-day super payment timeframe
Small business groups have previously raised concerns about the seven-day timeframe for super contributions to reach employees’ funds. Administrative pressures, as well as banking and clearing house processes, may make this target challenging for some businesses.
Potential for late-payment penalties
Under the legislation, employers may face penalties for late payments. External issues with super funds or clearing houses could still create a risk of delays, so it is important for business owners to review their payroll timing and processes.
Closure of the Small Business Superannuation Clearing House
The government plans to close the Small Business Superannuation Clearing House from 1 July 2026. This free online service for managing super contributions is a vital resource for small employers. Its closure has been met with strong concern from small businesses, many of which are questioning how they will manage their superannuation commitments.
Talk to us about getting your payroll system ready for payday super
With payday super now legislated and scheduled to commence from 1 July 2026, it is important to start preparing early.
If your payroll process and software systems are lagging behind the requirements for payday super, now is the time to speak with our team and update your payroll procedures.
