Payday Super is here: what your business needs to do before 1 July 2026

The biggest payroll reform in a decade is now law. From 1 July 2026, super must be paid on each payday rather than quarterly, and contributions must reach the employee's fund within 7 business days. The calculation base shifts from Ordinary Time Earnings (OTE) to Qualifying Earnings (QE), which is broader and includes salary sacrifice amounts.

This article is the practical version: what changes, what it costs your business in working capital, and the eight things you need to have ready before 30 June 2026.

What is actually changing

The reform stacks five changes that interact in ways most payroll systems are not yet ready for. Each one looks small on its own; together they remove an interest-free working-capital cushion that businesses have used for decades.

• Per-payday contribution timing. Super must be paid with each pay run — weekly, fortnightly or monthly. The quarterly cycle (28 October, 28 January, 28 April, 28 July) ends.
• 7 business-day receipt window. The employee's super fund must receive the contribution within 7 business days of payday, not just have it initiated. National public holidays (Australia Day, Good Friday, Easter Monday, Christmas Day, Boxing Day) are excluded from the count.
• OTE → Qualifying Earnings. The contribution base broadens. QE includes commissions paid for work performed outside ordinary hours (previously excluded from OTE) and amounts salary-sacrificed to super. For some employees the SG amount will rise.
• SBSCH closes 30 June 2026. The Small Business Superannuation Clearing House — the ATO's free clearing-house service for businesses with under 20 employees — is being phased out. Affected businesses need a commercial clearing-house solution in place before 1 July 2026.
• Stronger SGC for late payments. The Super Guarantee Charge has been redesigned. The late-payment penalty stays at 25% of the outstanding SGC (50% if you've been hit in the previous 24 months), but there is now also an administrative uplift of up to 60% of the unpaid SG and notional interest combined. Voluntary disclosure inside the required timeframes can reduce the uplift to nil; not disclosing is expensive.

The cash flow impact most businesses underestimate

Moving from quarterly to per-payday super contributions is not just a system change — it is a working-capital shift. Today, super accrued during a quarter doesn't have to leave your bank until 28 days after quarter-end. That's up to 118 days of interest-free float on every super accrual. From 1 July 2026, that float disappears.

Our Payday Super impact calculatorestimates the working-capital balance you currently hold (interest-free) between accrual and lodgement — the cash that needs to move to operating cash on day one. For a business with $1M in annual OTE on a fortnightly pay cycle, the shift is roughly $14,000 in working capital you've been using to run the business that needs to be replaced.

We are already migrating Payday Super-ready clients into systems that pre-fund contributions automatically with each pay run. If your payroll software cannot do that yet, the conversation needs to happen now — not in May 2026.

The 12% super rate (the bigger picture)

From 1 July 2025 the Superannuation Guarantee rate hit 12% — the final scheduled step in a decade-long increase. There are no further legislated increases. The 12% rate combined with Payday Super timing means the headline super cost stays the same but the cash-flow profile flattens dramatically. Quarterly super lumps disappear; per-pay super outflows replace them.

For a business running fortnightly pay on $1M of OTE: $120,000 of annual super, distributed as 26 fortnightly contributions of $4,615 each, instead of four quarterly lumps of $30,000.

What to do before 1 July 2026 — the eight-item checklist

1. Confirm your payroll system can pay super every pay run. Xero, MYOB and QuickBooks all have Payday Super-ready releases. Reckon and older desktop tools may not. If your software doesn't support per-pay super, plan a migration.
2. Identify your replacement clearing house. If you currently use SBSCH, sign up for a commercial clearing-house solution (Beam, ClickSuper, SuperChoice, or one integrated with your payroll software) before 30 June 2026.
3. Run a parallel test pay cycle on the QE basis. Verify that your software calculates Qualifying Earnings correctly — commissions, salary-sacrifice and bonuses are the common errors. Compare against your existing OTE calculation for the same period.
4. Re-model your 13-week cash flow. Replace four quarterly super lumps with weekly/fortnightly outflows. The total annual super doesn't change but your average bank balance does. Use the Payday Super impact calculator as a starting estimate.
5. Update your STP2 reporting. From 1 July 2026 you report both Qualifying Earnings and super liability in STP, replacing the current OTE-or-super-liability reporting. The ATO will have real-time visibility into payment timing.
6. Brief your team. Salary-sacrifice arrangements are particularly affected because amounts sacrificed to super are now part of QE for SG calculation. Some employees will see their SG amount move; flag it before they ask.
7. Document your back-up payment process. If your usual clearing house has an outage and a payment misses the 7 business-day window, you are still liable. Have a manual backup process documented and tested.
8. Make voluntary disclosure your default. If a payment misses the window, the new SGC regime rewards early voluntary disclosure (administrative uplift can be reduced to nil). Sitting on a missed payment hoping the ATO doesn't notice is now expensive.

The five payroll items most likely to break

From the migrations we've already run, these are the consistent stumbling blocks:

• Salary-sacrificed super. Under QE, the sacrificed amount is added back into the SG base. Many systems still calculate SG on post-sacrifice wages — that produces a shortfall.
• Bonus and commission payments. Out-of-cycle bonuses still need super paid with the run, not retrospectively. Lump-sum bonuses paid quarterly are the highest-risk item.
• New employees in their first pay cycle. Extended timeframes apply for the first super contribution after a new employee starts, but the rules are precise — don't rely on a general grace period.
• Terminations mid-cycle. Final pay needs super calculated and paid through the regular process, on time. ETP-related payments need separate treatment.
• Multi-fund employers. If staff are with different super funds, clearing-house turnaround times can vary. Your 7 business-day window starts at payday, not when you initiate the transfer.

What this means for our clients

Our payroll service is already running Payday Super-ready clients on the new model — same cash flow, different timing. For businesses on our Growth and Scale plans, the migration is included in the quarterly tax planning rhythm.

If you're not yet a client and your payroll system is not Payday Super-ready, the discovery call is the right place to start. We'll walk through your current setup, identify the gaps, and scope the migration before the cost of not migrating shows up on your first late-payment SGC notice.

References: ATO — The new super guarantee charge, Payday Super: what payments are qualifying earnings, Super guarantee penalties. SG rate confirmed at 12% from 1 July 2025; rules current as at the date of this article. Always confirm specific treatments with a registered BAS Agent or the ATO before relying on them for a payment decision.

This information is general in nature and does not constitute personal financial or tax advice. Please contact us to discuss your individual circumstances. Tax laws are subject to change; information on this page reflects legislation in effect as of April 2026.