Payday Super from 1 July 2026: The Biggest Superannuation Change

Are You Ready for Real-Time Super Payments?

From 1 July 2026, Australian employers will move from the current quarterly Superannuation Guarantee (SG) system to the new Payday Super regime.

A “Payday Super” regime requires employers to pay SG contributions for employees at the same time as their salary and wages are paid, rather than quarterly as currently required.

Qualifying earnings (QE)

QE are the total of the following:

• OTE (Ordinary Time Earnings), as per the current SG framework
• all payments expressly included within “salary or wages” or remuneration for individuals who come within the extended meaning of employee (include Contractor payments mainly for labour, Director Fee)
• Salary Sacrifice Super Contributions.

QE Day

Means the day on which the employer makes a payment of QE to the employee. In other words, it is the date the salary is actually paid to the employee.

Maximum contributions base (MCB)

A maximum contributions base (MCB) is an upper limit on the amount of SG contributions that an employer is required to make for an employee.

MCB = Concessional Contributions Cap X 100 / SG charge percentage.

MCB under Payday Super will apply as an annual limit rather than as a quarterly limit under the current law

So for 2026-27:

Annual MCB

$250,000

This means an employer is only required to pay SG on the first $250,000 of QE per employee per year.

Practical Example

Highly Paid Executive

Assume: Monthly salary (QE) paid is $25,000. Annual Salary is $300,000.

At the end of April, his total salary (QE) for the year became $250,000. Hence, by applying MCB, no further super is required for the months of May and June 2027.

When must employers make contributions for employees?

• “usual period” means the period starting on the QE day and ending on the 7th business day after the QE day, and
• “extended usual period” means the period starting on the QE day and ending on the 20th business day after the QE day in the following situations,
  • where the employer makes the contributions for the first time for a new employee, Or
  • first contribution to a new superannuation fund for an existing employee.

Bunching rule

The usual period for making contributions for any subsequent QE day would end before the extended period for the earlier QE day. In those cases, the contribution for the later QE day must be received by the end of the latest applicable due day.

Now the next payroll occurs:

Notice the problem:

• QE Day 1 contribution is not due until 29 July
• QE Day 2 contribution would normally be due by 17 July

The later payroll would become due before the earlier payroll.

Bunching rule applies

the employer can pay both by:

The due dates are effectively “bunched together.

Individual base SG shortfall

Individual base SG required = SG amount required – SG amounts paid before the due date (usual period of 7 days or extended period of 20 days as applicable)

Example

Employee paid:

Timeline:

For the Base SG Shortfall calculation:

Individual final SG shortfall

Individual final SG shortfall = Individual base SG shortfall – additional contributions after the due date (7 days / 20 days) before commissioner makes an SG assessment.

Continue the above example,

SG paid on 15^th August $300

Individual final SG shortfall = $400 – $300 = $100

Notional earnings Component

This is the interest calculated

• by applying the GIC rate to the individual base SG shortfall,
• on a daily compounding basis,
• until the day the entire shortfall has been paid in full or until the day an SG charge assessment is made by the Commissioner

Continue the above example,

The Commissioner has made the SG assessment on 20^th September

Notional Earnings =

$400 X 12% X 15 days (1^st Aug to 15^th Aug) = $1.97

$100 X 12% X 36 days (15^th Aug to 20^th Sep) = $1.18

Total $3.15

The above is simple interest calculation. The law says the interest is compounding. Hence the actual interest will slightly higher than the above.

Administrative uplift amount

An employer’s administrative uplift amount for a QE day is equal to 60% of the sum of:

• the total of the employer’s individual final SG shortfalls for the QE day, and
• the total of the employer’s individual notional earnings components for the QE day

Continue the above example,

Administrative uplift amount = ($100 + $3.15) X 60% = $61.89

Reduction in Administrative uplift amount

Reductions can be made in 2 ways:

Way 1: if no Commissioner-initiated assessment has been made in the past 24 months ending on the QE day à will be reduced by 20% (from 60% to 40%)

Way 2: if the employer lodges a voluntary disclosure statement in the approved form for the QE day before the day an SG assessment is made

The cascading levels of reduction under Way 2

Both Way 1 and Way 2, if applicable, can be applied separately or cumulatively.

Above example continued

Voluntary disclosure is lodged on 28^th August and paid $100 which was outstanding on  that day.

The employer can apply for the reduction of the administrative uplift amount in both Way 1 and Way 2.

He will get 20% reduction in Way 1 and 40% reduction in Way 2.

Hence, the Administrative uplift amount will be zero (60% – 20% as per Way 1 and 40% as per Way).

Choice loading

A choice loading applies where an employer makes contributions and the contribution does not comply with the choice of fund provisions.

The choice loading is an additional 25% on contributions

SG charge = Final SG shortfall + Notional earnings Component + Administrative Uplift Amount + Choice Loading

Assessment of SG charge by Commissioner

The Commissioner may make an assessment of an employer’s SG shortfall amount for a specified QE day, and the SG charge payable on that shortfall, on

• the Commissioner’s own initiative, or
• based on a voluntary disclosure statement for that QE day.

Penalty for late or non-payment of SG charge

If an employer is liable to pay an amount of SG charge and it is unpaid after 28 days from the day the charge became payable.

The late payment penalty is equal to

• 25% of the outstanding amount, or
• 50% of the outstanding amount if the employer has previously been liable for the penalty in the prior 24 months

GIC does not accrue on any late payment of the penalty. GIC on any unpaid SG charge will continue to accrue until the SG charge is paid in full.

Step 1 – Commissioner Assessment

The Commissioner assesses:

The legislation states:

SG Charge becomes payable on the day the Commissioner makes the assessment.

Therefore:

Step 2 – Employer Does Not Pay

Employer ignores the assessment.

28 days later:

The charge remains unpaid.

Step 3 – Commissioner Issues Current Notice

The Commissioner issues a Current Notice requiring payment.

Notice states:

The notice warns:

Pay within 28 days or a late payment penalty will apply.

Step 4 – Employer Still Does Not Pay

Employer again ignores the notice.

The late payment penalty arises.

First Breach

Penalty rate:

25%

Calculation:

Result

Plus GIC continues to accrue.

Second Breach Within 24 Months

Assume employer had another late payment penalty within the previous 24 months.

Penalty rate becomes:

50%

Calculation:

Result

Plus continuing GIC.

Who receives each of the above components?

Tax Deductibility