Are You Ready for Payday Super?
Wayne Willey
If you have employees, this is the biggest change to payroll in years, and the start date is almost here.
From 1 July 2026, the way you pay super changes completely. Instead of paying quarterly, you'll need to pay your employees' super at the same time as their wages. It applies to every employer in Australia, regardless of size or industry, and the deadline is the same for everyone.
Here's what's changing, what it means for your accounting software, and what you need to do before 1 July.
When does Payday Super start?
Payday Super starts on 1 July 2026. From that date, you can no longer pay super on a quarterly basis. Super has to be paid every time you run payroll.
From 1 July 2026, super must reach your employee's fund within 7 business days of payday.
That seven business day window is the part that catches people out. It's not enough to initiate the payment on payday. The contribution needs to actually be received by the employee's super fund within seven business days of the day you pay them (the ATO calls this the "QE day").
There's one exception worth knowing: for a brand new employee, or an employee who has just changed funds, you get an extended window of 20 business days for that first contribution while their fund details are confirmed.
This reform exists for a reason. The ATO estimates that more than $6 billion in super went unpaid in the last financial year. Paying super on payday gives both employees and the ATO real-time visibility over what's being paid and when.
What are Qualifying Earnings?
Alongside the timing change, there's a new term you'll start seeing: Qualifying Earnings (QE).
From 1 July 2026, your super guarantee is calculated as 12% of an employee's Qualifying Earnings, rather than their Ordinary Time Earnings (OTE) as it is now.
For most employees, the practical difference is small. QE is essentially a tidied-up, more consistent version of OTE, and for straightforward pay arrangements the amount of super you pay won't change at all.
There are a few differences worth flagging:
All commissions now count. Previously, a commission earned for work done outside ordinary hours could be excluded. Under QE, every commission an employee earns is included.
Overtime is still generally excluded, the same as it is now.
Salary sacrifice amounts that would have been QE if they hadn't been sacrificed are included.
You'll also report both your QE and your super liability through Single Touch Payroll (STP) on every pay run, which is how the ATO gets that real-time visibility.
If you have casual staff, commission-based workers, or anything unusual in your pay setup, it's worth having your bookkeeper check your earnings categories are coded correctly before 1 July. Getting the base wrong means either underpaying super (and facing a charge) or overpaying (a cash flow drain on every pay run).
What happens if you pay super late?
This is where it gets serious. If your super isn't received by the fund in time, you become liable for the Super Guarantee Charge (SGC), and the new SGC is more punishing than the old one.
The SGC is made up of four parts: your unpaid super shortfall, notional earnings (interest that compounds daily on the shortfall), an administrative uplift starting at 60% of the shortfall, and a choice loading of 25% if you didn't follow the choice of fund rules.
A common misunderstanding is worth clearing up here. Your ordinary super contributions are tax deductible in the year you pay them. The SGC itself is also deductible. But the general interest and the late payment penalty that come with getting it wrong are not deductible.
The late payment penalty can reach 50% of the outstanding SGC and cannot be remitted.
That penalty starts at 25% of the outstanding amount and rises to 50% if you've been hit with it in the previous 24 months. Once it applies, it can't be waived. The message is simple: pay on time, every time.
The clearing house you might be using is closing
If you currently pay super through the ATO's Small Business Superannuation Clearing House (SBSCH), take note. The SBSCH closes permanently around 30 June 2026.
You'll need to move to a SuperStream-compliant alternative before then. For most small businesses, that means using the super payment feature built into your payroll software. If you still use the SBSCH, log in and download your payment records before it shuts down.
What Payday Super means for Xero, MYOB and QuickBooks
The good news is that the major platforms are already built for this. Here's where each one stands.
Xero. Xero's Auto Super already lets you pay super more often than quarterly, so you can start paying per pay run now and test your process before the deadline. The pay run payment date becomes your QE day, and the fund needs to receive the contribution within seven business days. Before 1 July, check your earnings categories are mapped correctly and run a test reconciliation against a recent pay run.
MYOB. If you're on MYOB Business Payroll, the Pay Super feature is your SBSCH replacement, and it's included at no extra cost. You'll need to turn on Pay Super, set up a default fund for each employee, and confirm your payment frequency. Download your SBSCH records before the service closes.
QuickBooks Online. QuickBooks payroll (powered by Employment Hero) now offers HeroClear, a real-time clearing house that validates fund details automatically, with Beam still available as an alternative. Qualifying Earnings map to a "Label Q" category, and salary sacrifice is included in that total automatically. One thing to watch: posting a pay run does not automatically send the super through. Make sure your process actually triggers the payment, and turn on Employee Self Setup so new starters enter their own fund details.
Whichever platform you use, the same housekeeping applies: make sure every employee's fund details (fund name, ABN, member number) are accurate, because errors cause rejected payments and rejected payments cause late super.
The cash flow reality
There's a practical side to all of this that's easy to overlook. Super used to leave your business four times a year. Now it leaves every pay cycle.
For a business paying weekly or fortnightly, that's a real change to your working capital. It's worth modelling your cash flow under the new frequency before 1 July so there are no surprises. Some businesses are reviewing how often they run payroll as part of this.
What the ATO expects in the first year
It's not all stick. The ATO has confirmed how it will approach the first year, from 1 July 2026 to 30 June 2027.
Employers who try to do the right thing and fix issues quickly won't be the focus of ATO compliance action.
In other words, if you're making a genuine effort to comply and you correct mistakes promptly, you're considered low risk and you won't be a target. That said, this is not a grace period for doing nothing. Employers who simply carry on with quarterly habits and don't transition their systems will attract attention sooner.
What to do now
Here's your checklist before 1 July:
Confirm your payroll software is configured and ready for Payday Super
Audit every employee's super fund details for accuracy
Move off the SBSCH if you're still using it
Check your earnings and pay categories have the correct super treatment
Model the cash flow impact of paying super each pay run
Talk to your bookkeeper early, while there's still time to fix anything
This is a big change, but it's a manageable one if you start now rather than the week before. If you'd like a hand getting your payroll set up, transitioning off the SBSCH, or just want someone to check your setup is right, we can help. Take a look at our bookkeeping services to see how we work.
This article is general information and doesn't take your specific circumstances into account. For advice tailored to your business, get in touch with our team.