From 1 July 2026, super guarantee must be paid on every payday, and the contribution has to be received by the employee's fund within 7 business days of payday — not just sent.
Super is now calculated on 'qualifying earnings' (QE) instead of ordinary time earnings, and the 12% rate is unchanged. QE carries over everything previously counted for SG and additionally captures all commissions, including those for work wholly outside ordinary hours.
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Late super triggers a redesigned Super Guarantee Charge: the shortfall plus daily-compounding interest, a default 60% administrative uplift and possible penalties. The core charge is now tax-deductible, but the interest and penalties are not.
The ATO's PCG 2026/1 gives a risk-based, light-touch first year (1 July 2026 to 30 June 2027) for employers who genuinely try to comply — but it does not change the law or waive the charge.
The Small Business Superannuation Clearing House closed to new users on 1 October 2025 and is inaccessible from 1 July 2026; employers need an alternative clearing house or payroll super solution and must build in SuperStream transit time.
The change is about timing, not amount: total super owed is unchanged, but cash leaves the business every pay run, so weekly and fortnightly payers need to forecast and ring-fence super with each payday.
From 1 July 2026, Australian employers must pay super on every payday and make sure the money reaches each employee's fund within seven business days — ending the quarterly super cycle that has run for three decades.
Published July 2026.
Payday Super is now law, not a proposal. If you employ staff — one apprentice or fifty — the way you calculate, pay and report superannuation changed on 1 July 2026. The super rate hasn't moved. What has changed is the timing, the calculation base, the reporting, and the cost of getting it wrong. This guide sets out the mechanics in plain English, with the primary sources at the end.
Pay super every payday. From 1 July 2026, super guarantee (SG) is paid on each pay cycle — weekly, fortnightly or monthly — instead of quarterly.
The deadline is fund receipt, not payment. A contribution is on time only if it is received by the employee's super fund, with enough information to allocate it, within 7 business days after payday. Because the test is receipt, you carry the risk of any clearing-house or SuperStream delay.
New employees get 20 business days. The first contribution for a new employee, or into a new fund, has a 20-business-day window to allow for fund nomination and verification. After that, the 7-day rule resumes.
A new calculation base: qualifying earnings. SG is now 12% of qualifying earnings (QE), which replaces ordinary time earnings (OTE). QE carries over everything previously counted for SG and now captures all commissions, including those for work wholly outside ordinary hours.
The rate is 12% and frozen. No further increases are legislated.
Report more, each payday. Through Single Touch Payroll (STP), you must report year-to-date QE and year-to-date SG liability for every employee, each pay.
A redesigned charge for lateness. Miss the deadline and a rebuilt Super Guarantee Charge applies: the shortfall, daily-compounding interest, a default 60% administrative uplift, and possible penalties.
A one-year soft landing. The ATO's guideline PCG 2026/1 sets a risk-based approach for the first year — but it does not change the law.
Superannuation guarantee has been paid quarterly since the scheme began in 1992: employers had until the 28th day after the end of each quarter to pay, and contributions were effectively treated as made when sent. That quarterly gap had two consequences. First, it let some employers use accrued super as a short-term cash float. Second, and more seriously, it made unpaid super hard to see until long after the fact.
Treasury's case for change rests on scale. Government and ATO analysis has long pointed to a persistent gap between the super employees are owed and what actually reaches their funds. Because a quarterly system only surfaces a problem months later — often after a business has failed — workers frequently never recovered what they were owed. Unpaid super falls hardest on younger, lower-paid, casual and insecurely employed workers.
Paying super at the same time as wages is designed to close that gap. Contributions land in funds sooner (so they are invested and compound earlier), the ATO gets near-real-time visibility to spot shortfalls, and large payroll liabilities can't quietly build up. The government has framed the change as leaving workers — particularly younger employees with decades of compounding ahead of them — better off at retirement, with millions of employees expected to benefit over time.
The reform was enacted through two Acts — the Treasury Laws Amendment (Payday Superannuation) Act 2025 (No. 57, 2025) and the companion Superannuation Guarantee Charge Amendment Act 2025 — which received Royal Assent on 6 November 2025. Supporting regulations were made on 19 February 2026, and the ATO's first-year compliance guideline, PCG 2026/1, covers the transition. The start date has not been deferred.
The heart of the reform is a single new deadline. Under the old regime you paid quarterly and the contribution counted when it left your account. Under Payday Super, the clock starts on payday and stops when the fund receives the money.
Situation
Old rule (to 30 June 2026)
New rule (from 1 July 2026)
When SG is paid
Quarterly, by the 28th after quarter-end
Each payday
The deadline
Deemed paid when sent
Received by the fund within 7 business days of payday
"Business days" excludes weekends and public holidays. The critical mechanical point is that the deadline is measured at the fund, not your bank. If your clearing house or a SuperStream gateway takes several days to process a contribution, that transit time eats into your seven days — so you need to know your real end-to-end lead time and pay early enough to absorb it.
From 1 July 2026, SG is calculated as 12% of qualifying earnings, a new term that replaces ordinary time earnings. For most employees on straightforward pay, QE and OTE produce very similar figures — QE carries over everything previously counted for SG up to 30 June 2026. But there are differences that matter, and they mean you should re-check your pay codes, not just re-time your payments.
What's included in QE: base wages and salary, casual loading, shift loadings on ordinary hours, paid leave taken during employment, and most regular allowances. Crucially, QE captures all commissions, including commissions for work performed entirely outside ordinary hours — a broadening from OTE.
What's excluded from QE: overtime pay and overtime penalties, expense reimbursements, paid parental leave, and most termination and lump-sum-on-termination payments — broadly the same exclusions that applied under OTE.
The practical task before go-live is a wage-code review: make sure every QE component has SG applied and that your pay codes map cleanly to the new base. QE is also designed to align with STP Phase 2 pay-item classification, which feeds the new reporting obligation below.
If a contribution isn't received by the fund on time, the Super Guarantee Charge (SGC) applies — and it has been rebuilt. It is now assessed by the ATO based on reported and received-contribution data, rather than self-assessed via a charge statement, and it is assessed per payday rather than per quarter.
The redesigned SGC is built from:
The SG shortfall — the unpaid amount, calculated on qualifying earnings at 12%.
Notional earnings (interest) — accruing daily and compounding at the ATO's General Interest Charge (GIC) rate, replacing the old flat nominal interest. The GIC rate is set quarterly and moves, so the exact figure depends on the period.
An administrative uplift — 60% by default, applied to the sum of the shortfall plus notional earnings (not simply 60% of the shortfall). It can be reduced — potentially to nil — for good compliance history and timely voluntary disclosure. Industry analysis suggests it drops to 40% where the ATO has not initiated an SGC assessment in the previous 24 months, with further reductions for early voluntary disclosure; confirm the exact tiers against the finalised regulations.
A choice loading where choice-of-fund rules are breached — 25% of the affected contributions, capped at $1,200 per notice period.
There is one big change in your favour: the core SGC is now tax-deductible, reversing the old position where the entire charge was non-deductible. The interest and any additional penalties remain non-deductible. Separately, the old maximum Part 7 penalty of up to 200% of the SGC has been abolished and replaced with an additional penalty of up to 25% (rising to 50% for repeat non-compliance) of the unpaid SGC where it stays unpaid after assessment. You can still reduce the shortfall by making a late contribution up until the day the ATO assesses the charge for that payday — but late payment cannot cut the SGC to nil, because the interest and uplift remain.
The ATO's PCG 2026/1, "Payday Super: first year ATO compliance approach," sets a risk-based approach for QE days from 1 July 2026 to 30 June 2027 and does not apply to any QE day on or after 1 July 2027.
It sorts employers into three zones:
Low risk: you made on-time contributions intending to fully comply, some didn't reach or couldn't be allocated by the fund in time, but you fixed that "as soon as reasonably practicable" so final shortfalls are nil. The ATO "will not have cause to review" these employers.
Medium risk: you don't meet the low-risk test, but final shortfalls for all employees are nil by 28 days after quarter-end (for example, an employer who kept paying quarterly but paid enough). Lower priority than high risk.
High risk: one or more final shortfalls remain after 28 days following quarter-end — genuine underpayment, uncorrected errors, or ignoring the payday change entirely. Highest priority for investigation.
The catch is important. PCG 2026/1 governs where the ATO points its compliance resources — it does not waive the law. As the guideline states, if the ATO obtains "definitive information" that an employer has an SG shortfall, it is required to apply the law and raise the SGC, even for a low-risk employer. The charge is still legally payable during the grace year; the ATO simply won't proactively chase employers who are genuinely trying and fixing errors quickly. There is no small-business carve-out and no size-tiered enforcement — the same rules apply to every employer.
The change is about timing, not total cost. You owe the same super over a year — you just fund it much sooner, and far more often.
Pay cycle
Super runs per year (old → new)
What it means
Weekly
~4 → 52
Largest admin and cash-flow shift; super leaves with every pay
Fortnightly
~4 → 26
Big increase in payment events; buffer disappears
Monthly
~4 → 12
Smallest jump; some advisers weigh moving to monthly to cut super-run frequency
Illustrative only — the figures below are a simplified example to show the shape of the change, not a forecast for your business. Get advice on your own numbers.
Consider a fortnightly payer whose staff earn $50,000 of qualifying earnings per pay run. SG at 12% is $6,000. Under the old system, up to three fortnights of that ($18,000) could sit in the business before the quarterly payment fell due. Under Payday Super, that $6,000 must be funded and sent each fortnight so it lands in funds within seven business days. The annual super bill is identical; the working-capital cushion that quarterly timing provided is gone.
Widely-cited industry modelling has put the extra working capital a typical fortnightly-paying small business might need to manage the transition at around $124,000 — treat that as an illustrative estimate, not an official figure; it represents money needed sooner, not additional cost. The businesses most exposed are labour-intensive, low-margin, seasonal and high-turnover operations — construction, hospitality, retail and transport among them — where payroll is the largest and most frequent outgoing. The practical response is to treat super as part of every pay-run cost, ring-fence it with each payday, build a per-payday cash-flow forecast, and, if you need a working-capital facility, set it up before you're relying on it.
The way you physically move super is changing too. The ATO's Small Business Superannuation Clearing House (SBSCH) is being retired as part of the reform. New users could no longer register from 1 October 2025, existing users could use it only until 11:59pm AEST on 30 June 2026, and it is inaccessible from 1 July 2026. If you used it, you needed to download your records before that cut-off, because there is no post-closure retrieval. Your alternatives are payroll or accounting software with built-in super functionality, a super fund's clearing house, or a commercial clearing house.
One transition trap deserves particular attention. SG for the quarter ending 30 June 2026 is still due by 28 July 2026 under the old quarterly rules — but the SBSCH is inaccessible from 1 July 2026, so you cannot use it to make that final quarterly payment. If you have relied on the clearing house for your June-quarter super, you need your replacement clearing house or software in place before 30 June 2026, not after, or you will be locked out at exactly the moment that payment falls due.
On the plumbing side, SuperStream was upgraded to Contributions v3.0 from 1 July 2026 to support the shorter deadline. It adds the New Payments Platform (NPP) as an approved, near-real-time payment method — including weekends and public holidays — clearer error messaging so rejected contributions can be fixed faster, and a new member verification step. Funds now have to allocate a contribution to the member's account, or return it, within 3 business days of receipt, so a bounced payment surfaces quickly enough for you to re-send inside your window.
One point the ATO stresses: outsourcing does not transfer the obligation. Even when you use a clearing house, payroll bureau or software provider, the seven-business-day, received-by-fund test rests with you. That makes your provider's processing speed and your choice of payment method genuinely material.
STP still lodges on or before each payday, but from 1 July 2026 two new figures become mandatory for each employee: year-to-date qualifying earnings and year-to-date super liability. This is what gives the ATO near-real-time visibility to match your payroll against what funds actually receive. There is a one-year runway: through 2026–27 the ATO won't reject reports that omit qualifying earnings, but from 1 July 2027 reports lacking both fields will be rejected and penalties may apply. Check that your payroll software has been updated to capture and report these fields.
If you run payroll in OneBookPlus, the platform calculates Australian payroll — PAYG withholding, super and leave — flags pay below the minimum for supported awards, generates payslips with the fields Fair Work requires, and produces a year-to-date payroll summary (gross wages, PAYG withheld and employer super) — the figures that feed your STP reporting. STP lodgment and the actual contributions are still made the usual way: STP through your STP-enabled software or tax agent, and super through your super fund or clearing house via SuperStream.
Confirm your pay-run super timing. Work out your real end-to-end lead time (payroll → clearing house → fund receipt) and set payment timing so contributions land within 7 business days.
Sort out a clearing-house replacement if you used the SBSCH, and download your old SBSCH records if you haven't.
Pay your final June-quarter SG (due 28 July 2026) through your new clearing house, not the SBSCH, which is inaccessible from 1 July 2026.
Review your wage/pay codes so SG applies to all qualifying earnings — including all commissions, even those for work wholly outside ordinary hours.
Clean your employee and fund data. Validate super fund details and USIs, and tighten new-hire onboarding and stapled-fund collection.
Check your payroll software reports YTD QE and YTD SG liability via STP, and test an end-to-end pay run before relying on it.
Reconcile prior and current super to avoid carrying forward historical shortfalls or breaching contribution caps as timing shifts.
Build a per-payday cash-flow forecast and ring-fence super with every pay run; arrange any working-capital facility early.
Handle new employees with the 20-business-day first-contribution window in mind.
No. You must pay super each payday, but the legal test is that the contribution is received by the employee's fund within 7 business days of payday. Because that includes clearing-house transit time, most employers should initiate super with — or shortly after — each pay run.
No. The SG rate is 12% for 2026–27 and stays there; it reached its final legislated step on 1 July 2025. What changed is the timing and the calculation base, not the percentage.
QE carries over everything OTE counted for SG and broadens it — most notably, all commissions are now included, even for work done entirely outside ordinary hours. Overtime, reimbursements, paid parental leave and most termination payments remain excluded.
An out-of-cycle payment of qualifying earnings — an ad-hoc bonus, back-pay or a commission run made outside your normal pay cycle — does not start its own separate 7-business-day deadline. The SG on it is generally aligned to your next ordinary (non-out-of-cycle) payday rather than triggering its own clock. This matters most in real estate, sales and hospitality, where commissions and bonuses are often paid off-cycle; confirm the exact timing for your setup against the ATO's Payday Super deadlines guidance.
The redesigned Super Guarantee Charge can apply — the shortfall, daily-compounding interest at the GIC rate, and a default 60% administrative uplift. During the first year, PCG 2026/1 means the ATO won't proactively pursue genuinely-trying employers who fix errors promptly, but the charge is still legally payable if the ATO has definitive information about a shortfall.
The core charge is deductible from 1 July 2026 — a reversal of the old position. The interest (notional earnings) component and any penalties assessed after the ATO's SGC assessment remain non-deductible.
The Small Business Superannuation Clearing House is inaccessible from 1 July 2026. Use payroll or accounting software with super functionality, a super fund's clearing house, or a commercial clearing house — and download your old SBSCH records if you haven't already.
No size-based carve-out. PCG 2026/1 offers a risk-based first year for all employers, but the 1 July 2026 start and the 7-business-day rule apply uniformly regardless of business size.
The first contribution for a new employee, or into a new fund, has a 20-business-day window instead of 7, to allow for choice-of-fund, stapled-fund lookup and member verification. After that first contribution, the standard 7-day rule applies.
This guide relies on primary and official sources, cross-checked against professional-firm analysis where the ATO's public pages were unavailable to automated retrieval.
Legislation: the Treasury Laws Amendment (Payday Superannuation) Act 2025 (No. 57, 2025; assent 6 November 2025), the companion Superannuation Guarantee Charge Amendment Act 2025, and supporting regulations made 19 February 2026.
ATO — PCG 2026/1, "Payday Super: first year ATO compliance approach," covering the transition from 1 July 2026 to 30 June 2027, plus ATO guidance on the SBSCH closure and the current SG rate and maximum contribution base.
Treasury: Payday Super policy and consultation materials setting out the rationale for aligning super payments with wages.
Where figures are time-sensitive (the GIC rate, which moves quarterly) or industry estimates rather than official (the ~$124,000 working-capital figure), we've flagged them as such. The illustrative cash-flow example is simplified for explanation and is not advice for any particular business. Penalty and administrative-uplift reduction tiers are drawn from professional-firm readings of the finalised regulations and should be confirmed against the primary law for your situation. This is general information, not financial, tax or legal advice — check your circumstances with your accountant or adviser.
Payday Super doesn't raise the super rate or the total you owe. It moves the money forward and makes it visible in near-real-time. The two changes that matter most in practice are the seven-business-day, received-by-fund deadline — which puts clearing-house and SuperStream timing squarely on your shoulders — and the shift from OTE to qualifying earnings, which means re-checking your pay codes, not just your calendar. Sort out your clearing house, confirm your software reports the new STP fields, and treat super as a cost of every pay run rather than a quarterly catch-up. The first year is a soft landing for employers who genuinely try; from 1 July 2027, it won't be.
