New Compliance Rules for Employers

Payday Super was first announced in the 2023/2024 Federal Budget, which plans to change the legal requirement to pay superannuation for employees from quarterly, to paying superannuation at the same time the employee salary and wages are paid.

But if you are an employer and this is the first time you have heard about this kind of thing, best you read on as we dive into what Payday Super means for you!

What Is Payday Super?

From 1 July 2026, instead of the current legal requirement to pay quarterly superannuation contributions, you will be required to pay superannuation on the same day as you employee salary and wages.

Coinciding superannuation payment with regular pay cycles, rather than being deferred to quarterly payments aims to strengthen the superannuation system, ensuring more consistent growth in retirement savings for all Australians.

How can Employers Prepare?

This official implementation date should give you ample time to adjust your payroll systems and processes to accommodate the change.

Employers will need to adapt to the introduction of Payday Super, but the transition comes with notable advantages.

First, it requires changes to payroll processes to ensure superannuation contributions are made in sync with regular pay cycles. Such adjustment, while potentially challenging initially, simplifies payroll management by reducing the liabilities that accrue between quarterly payments.

Moreover, adopting Payday Super positions businesses as forward-thinking employers who prioritise their employees’ financial well-being.

To prepare, employers should start by:

• Reviewing their current payroll systems;
• Consulting with payroll providers; and
• Making necessary adjustments ahead of the 1 July 2026 deadline.

Overall, this proposal reflects a commitment to a more equitable and sustainable retirement system for all Australians.

Potenial Compliance Penalties

Compliance with Payday Super is crucial to avoid penalties and ensure smooth payroll operations.

Currently, employers must make superannuation payments quarterly. With the introduction of Payday Super, these payments will need to be made on each payday, starting from 1 July 2026.

Failing to meet this requirement will result in the Super Guarantee (SG) charge, which includes the unpaid super amount, interest, and an administration fee. The charge exceeds the amount an employer would have paid in super and is not tax deductible, making it a costly mistake.

The SG charge aims to enforce compliance and ensure that employees receive their super contributions timely.

Employers should familiarise themselves with the details of the SG charge and ensure their payroll systems are updated to comply with the new requirements. Proactive steps now can help avoid penalties and ensure a smooth transition to Payday Super.

Support and Resources

Transitioning to Payday Super might seem daunting, but there are ample resources and support available to help employers navigate this change.

The Australian Taxation Office (ATO) will provide guidance and tools to assist employers in integrating super payments into their regular payroll processes.

Payroll providers will also play a critical role, offering updates and support to ensure systems are compliant with the new requirements.

Employers are encouraged to consult closely with industry stakeholders and take advantage of available resources to ensure a smooth transition.

Preparing ahead of the 1 July 2026 deadline will allow businesses to make necessary adjustments gradually and avoid the pitfalls of last-minute changes. By leveraging the support and resources available, employers can ensure they are fully compliant and ready for its implementation.

Embracing your Future

Payday Super is set to transform the way we manage superannuation, benefiting both employees and employers. By ensuring more frequent super payments, it strengthens the superannuation system and supports better retirement outcomes.

Employers can enjoy streamlined payroll processes and reduced liabilities, while employees gain improved retirement savings and protection against missed payments.

Get Ready for Payday Super!

Ready to learn how it impacts you?

Book a call with us today to discuss how we can help you prepare for this upcoming change. Let’s work together to ensure a smooth transition and a brighter future for all.