FBT, Payroll
Q&A – Payroll – RFBA
This post is only available to members.
Read more
Payday Super – arriving soon
Editors note – TaxEd is pleased to advise that our affiliate, Webb Martin Consulting Pty Ltd, will be conducting a 2 hour webinar on 2 December 2025 looking at the specifics of the Payday Super: the new SG regime– the webinar will be presented in conjunction with Robyn Jacobson who was heavily involved in Payday Super design issues. Details of the webinar can be viewed here.
The Payday Super regime represents the most significant change to employer superannuation since mandatory employer superannuation was introduced in 1993 through the Superannuation Guarantee (‘SG’) reforms.
Announced in the Federal Budget in May 2023, the Government’s Payday Super regime has now been introduced in Parliament via the Treasury Laws Amendment (Payday Superannuation) Bill 2025 and Superannuation Guarantee Charge Amendment Bill 2025. The bills were passed by the both Houses of Parliament without amendment on 4 November 2025.
Here are some of the key changes that will be heralded in by the Payday Super reforms:
- The new changes are proposed to take effect from 1 July 2026.
- Employers will now be required to pay their employees’ SG at the same time as their salary and wages.
- An employer will be liable for the superannuation guarantee charge (‘SGC’) unless contributions are received by their employees’ superannuation fund within the required timeframe, generally 7 business days after payday. This is a significant change from the current regime which operates on a quarterly basis.
- Qualifying earnings (‘QE’) will become the base on which minimum employer superannuation contributions are payable. QE includes:
- ordinary time earnings (‘OTE’)
- salary sacrifice superannuation contributions
- other amounts which are currently included in an employee’s salary or wages for SG
- SGC will now consists of:
- Individual final SG shortfall
- Notional earnings
- Administrative uplift
- Choice loading (where employers have not complied with choice of fund rules)
- The deadline for superannuation funds to allocate or return contributions that cannot be allocated will now be reduced to 3 business days (down from the previous 20 days).
The Payday Super regime will also be supported by various Legislative Instruments and Regulations all of which are yet to be issued but can be expected in coming months.
Recognising the magnitude of the change, the ATO has released a draft practice compliance guideline (PCG 2025/D5) in relation to compliance for the 2026/2027 year (the 1st year of operation of the Payday Super Regime). At paragraph 7 the ATO states:
“7. There is concern that employers will not have had sufficient time to deploy, test and embed changes within their payroll systems and business processes prior to Payday Super law commencing on 1 July 2026. This increases the risk that employers will be unable to fully meet the requirements to reliably have contributions processed and accepted by super funds in the Payday Super timeframes“.
The PCG proposes a risk-based framework to compliance issues (whether the ATO will apply compliance resources) as per paragraph 19 and 20:
| Risk zone | Requirements |
| Low | An employer will be in the low-risk zone where all of the following have been met: 1) the employer attempted to ensure that all of their individual base SG shortfalls in relation to their employees were nil for the QE day, by making on-time contributions equal to or exceeding the individual SG amount 2) some or all of the eligible contributions were not received by the relevant fund (and allocable for the benefit of the employee) on time 3) these eligible contributions are received by the relevant funds and allocable for the benefit of the employees as soon as reasonably practicable, resulting in the employer having individual final SG shortfalls of nil for all employees for the QE day at that time. ATO will not have cause to review these employer’s actions. |
| Medium | An employer will be in the medium-risk zone where the employer does not meet the criteria to be in the low-risk zone, but the individual final SG shortfalls for all their employees are nil by 28 days after the end of the quarter in which the qualifying earnings were paid. ATO may apply compliance resources to investigate whether the employer has an SG shortfall for one or more QE days, however will be given lower priority than arrangements that are rated high risk. |
| High | An employer will be in the high-risk zone where the employer does not meet the requirements to be in the low-risk or medium-risk zone, and if they have one or more individual final SG shortfalls greater than nil for their employees by 28 days after the end of the quarter in which the qualifying earnings were paid. ATO will apply compliance resources to investigate whether the employer has an SG shortfall for one or more QE days. High-risk arrangements will be given the highest priority resourcing. |
There were calls for a more concessional transitional approach (including a delayed start date) for smaller employers but as the legislation has now passed through Parliament, all employers should start to plan for the introduction of Payday Super now.
Some of the more obvious impacts are related to cash flow management and systems/procedures/timings around payroll and superannuation processing. The ATO operated Small Business Superannuation Clearing House (restricted to smaller employers/businesses) will also be discontinued from 1 July 2026. Employers using that service will need to engage with a new super clearing house, another process that should be given plenty of lead time.
TaxEd will cover developments in the introduction of Payday Super in future TaxEd Update newsletters.
Need more information? TaxEd’s affiliate, Webb Martin Consulting, will be conducting a 2 hour webinar titled Payday Super: the new SG regime – presented in conjunction with Robyn Jacobson who was heavily involved in Payday Super design issues. Details here.
If you would like to know more about membership or become a member, please visit our website for more information.
Subscribe to our newsletter for more updates and articles.
This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.