From 1 July 2026, one of the most significant payroll compliance changes in recent years will take effect. Employers will no longer pay Superannuation Guarantee (SG) contributions quarterly. Instead, super contributions will need to be paid with every pay cycle, requiring contributions to reach employees’ nominated super funds within seven business days of payday.
Below is a summary of what is changing, why it is being introduced, and what employers should prioritise before the deadline.
What’s Changing
Under the new rules:
- SG contributions must be paid at the same time employees are paid.
- Contributions must reach the employee’s super fund within 7 business days of payday.
- The SG rate remains at 12% of Qualifying Earnings.
- The new requirements apply to all employers, including companies, sole traders, partnerships, and trusts.
Qualifying Earnings include payment for ordinary hours of work, as well as any salary sacrifice super contributions.
Maximum Contributions Base
From 1 July 2026, the Maximum Contributions Base (MCB) will be set at $250,000 per annum.
This creates a maximum SG liability of $30,000 per employee each financial year. Once an employee reaches the threshold, SG contributions can cease for the remainder of that year.
Age Threshold
SG eligibility applies to all employees aged 18 and over, regardless of earnings.
Employees under 18 remain eligible if they work at least 30 hours a week.
Fund Allocation Timing
Super funds will also face stricter processing requirements.
Funds must allocate contributions to members’ accounts or return them to the employer if they cannot be accepted within three business days of receipt.
Why Payday Super Is Being Introduced
The reforms are designed to reduce unpaid super and improve transparency across the superannuation system.
According to the Treasury, unpaid super reached approximately $5.2 billion in the 2021/22 financial year.
Under the current quarterly system, delayed or unpaid super contributions can go unnoticed for extended periods. Payday super is intended to enhance visibility for employees and enable earlier identification of unpaid contributions.
Treasury estimates that a 25-year-old median-income earner receiving superannuation quarterly and wages fortnightly could be around $6,000 better off at retirement under the new framework.
Penalties
Late payment offsets on SG contributions will no longer be available from 1 July 2026.
Importantly, making late SG payments before an ATO SG Charge assessment will no longer reduce the SG charge liability.
ATO Grace Period
The ATO will provide a transition grace period from 1 July 2026 to 30 June 2027 for certain employers, depending on their circumstances and risk classification.
Employers classified as “low risk” are not expected to be subject to review during this period.
However, this leniency will end on 1 July 2027.
What This Means for Businesses
Businesses currently relying on quarterly superannuation payments may need to significantly adjust their payroll processes and cash flow management before 1 July 2026.
For some employers, the operational impact may outweigh the compliance impact.
Early preparation may help reduce:
- Payroll disruption
- Late SG exposure
- Administrative pressure
- Cash flow strain
Key Issues Businesses Should Review Now
1. Cash Flow Planning
Businesses will need to pay SG contributions with each pay cycle rather than retaining those funds until after the quarter ends.
For some businesses, particularly SMEs, this may place additional pressure on short-term cash flow.
2. Payroll System Readiness
Employers should engage payroll providers early to confirm that their systems are:
- SuperStream compliant
- Capable of payday super processing
- Tested before 1 July 2026
3. Clearing House Changes
The Small Business Superannuation Clearing House (SBSCH) will close on 30 June 2026.
Businesses currently relying on the SBSCH should transition to an alternative SuperStream-compliant clearing house as soon as possible.
4. Increased ATO Visibility
Real-time STP reporting of qualifying earnings and SG obligations will enable the ATO to identify unpaid or late super contributions more swiftly.
5. Contractor Arrangements
Businesses should review contractor arrangements carefully.
Some contractors may fall within the extended definition of an employee, creating superannuation guarantee (SG) obligations that may have previously been overlooked.
6. SMSF Readiness
SMSF trustees should ensure that:
- Their fund has a valid Electronic Service Address (ESA)
- Annual returns are lodged on time
If an SMSF annual return becomes overdue, the fund may lose its regulated status and become unable to receive contributions or rollovers.
7. Employee Communication
Employers should proactively communicate changes to payday super to employees, particularly when payment timing or reporting visibility may differ from current processes.
8. Administrative Burden
The move to payday super is expected to increase administrative obligations for many businesses. Additional time may be required for:
- Payroll processing
- Compliance monitoring
- Reconciliation
- Internal system management
Next Steps
With the 1 July 2026 commencement date now approaching quickly, employers should prioritise preparation as soon as possible:
- Confirm your payroll system is SuperStream-compliant and ready for payday super
- Transition away from the SBSCH before it closes on 30 June 2026
- Review contractor arrangements to confirm SG obligations
- If you operate an SMSF, confirm your ESA is valid, and your annual return is lodged
- Communicate changes to employees ahead of the new pay cycle
The ATO has published additional resources, including fact sheets and checklists, to help businesses prepare.
Optima Partners will continue to monitor developments and provide further guidance as needed.
If you would like assistance reviewing your payroll systems, SG obligations, or operational readiness before 1 July 2026, we can help.
For more information, contact our team at info@optimapartners.com.au or call (08) 6267 2200.
