From 1 July 2026, employers will be required to pay employees’ superannuation at the same time as salary and wages.
This reform, known as Payday Super, shifts super from a quarterly payment cycle to a pay-cycle obligation.
While the Super Guarantee rate does not change, the timing does — and that timing shift has operational and cash flow implications for Australian businesses.
Let’s break down what is changing, what is not, and what employers should be reviewing now.
Payday Super is a reform requiring employers to pay superannuation contributions at the same time as wages instead of quarterly.
It starts on 1 July 2026.
Under the current system, employers must pay super at least quarterly, with contributions due 28 days after the end of each quarter.
From 1 July 2026, super becomes a pay-cycle obligation.
This change forms part of the Government’s broader superannuation reform agenda, with the design details confirming the intent to strengthen compliance and ensure super is paid on time.
The Australian Taxation Office (ATO) has previously estimated that $3.6 billion worth of super went unpaid in 2020–21. Further detail on the policy design and compliance framework can be found in the Government’s published Payday Super design update.
By aligning super contributions with each pay cycle, the reform aims to improve transparency, reduce unpaid super and support stronger retirement outcomes over time.
For employees, this means super should land in their fund sooner.
For employers, it means super moves from a quarterly process to a payroll process.
From 1 July 2026, several structural changes take effect:
Super must be paid each pay cycle
Contributions must reach the employee’s fund within 7 business days of payday
The Super Guarantee Charge framework is updated
The ATO Small Business Superannuation Clearing House closes
The Super Guarantee rate itself does not change.
The percentage remains 12%.
What changes is the timing and visibility of super payments.
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From 1 July 2026, super contributions must be received by the employee’s super fund within 7 business days of payday.
It is not enough to initiate the payment within that window. The contribution is only considered compliant once the employee’s fund receives it.
If contributions are not received within seven business days, employers may become liable under the updated Super Guarantee Charge framework.
Earlier design materials referenced a seven-day window, and the final legislation confirms that this timeframe is calculated in business days. This distinction matters, particularly around weekends and public holidays, and should be factored into payroll processing timelines.
Compared to the current quarterly system, this represents a significant tightening of compliance expectations. Under the existing rules, employers have until 28 days after the end of each quarter to settle super. Under Payday Super 2026, the window moves much closer to each individual pay run.
For payroll teams, this means processing, approval and payment release timelines must comfortably sit within that seven-business-day requirement. Settlement delays, failed payments or internal approval bottlenecks will have faster compliance consequences than they do today.
The Super Guarantee Charge (SGC) framework will be strengthened under Payday Super.
The updated model is designed to:
• Ensure employees are compensated for late super payments
• Incentivise employers to correct missed payments promptly
• Increase consequences for repeated or deliberate non-compliance
The reform also improves reporting alignment, allowing regulators to identify unpaid or late super more quickly than under the quarterly model.
For employers, this reinforces the importance of accurate payroll processing and timely settlement.
From 1 July 2026, super will be calculated as a percentage of qualifying earnings.
Qualifying earnings include ordinary time earnings and other amounts treated as salary or wages for Super Guarantee purposes under the updated framework.
For most employers, this will not represent a significant shift in super calculation. However, payroll systems should be reviewed to ensure earnings classifications and pay codes are mapped correctly.
The ATO Small Business Superannuation Clearing House (SBSCH) will close from 1 July 2026 as part of the Payday Super reforms.
Employers currently using the SBSCH will need to transition to an alternative SuperStream-enabled solution before the commencement date.
Planning this transition early will help avoid operational pressure as the new requirements take effect.
A common misconception about Payday Super is that it increases superannuation costs.
It does not.
The Super Guarantee rate remains 12%.
The total super liability does not change.
What changes is when that liability must be paid.
Under the quarterly model, businesses pay wages now and settle super later.
From July 2026, those payments move much closer together.
Super becomes:
• A pay run task, not a quarterly task
• A pay-cycle cash outflow, not a quarterly settlement
• A more visible compliance obligation
For labour-heavy businesses in particular, this represents a structural timing shift.
One of the most important aspects of Payday Super 2026 is not the rate of superannuation, but the timing of when it leaves your business.
Under the current quarterly system, wages are paid throughout the quarter while super is accrued in the background. Employers then have up to 28 days after the end of each quarter to settle the total super liability. In practice, this creates a timing gap between when wages are paid and when super is actually transferred to the employee’s fund.
From 1 July 2026, that gap largely disappears.
Super will need to be paid alongside each pay run and received by the employee’s fund within 7 business days. This means the super liability moves much closer to the wage payment itself.
The total cost of super does not increase under Payday Super. However, the working capital position of a business may change. Cash that was previously held for several weeks, or in some cases months, will now leave the business far more frequently.
For organisations operating on tighter margins or managing high labour costs, this can affect short-term liquidity. It may require adjustments to forecasting, internal approval workflows, and the alignment between billing cycles and payroll cycles.
This reform does not introduce a new expense. It changes the rhythm of when an existing expense must be funded.
▶ Watch: Pay Cat CEO, Garth Belic, explain the cash flow implications of Payday Super on cashflow
Preparing for Payday Super is largely about tightening processes and ensuring your payroll workflow supports a seven-business-day settlement window.
Here are the key operational areas employers should review.
Super must be calculated, approved and released as part of each pay run.
If super is currently treated as a separate quarterly task, that approach will need to change. From 1 July 2026, super becomes a pay-cycle obligation. Payroll systems and internal processes should reflect that shift so contributions are processed consistently alongside wages.
Super contributions are only considered compliant when received by the employee’s fund.
If your payment provider, clearing solution or internal approval chain introduces delays, those days count toward the seven-business-day window. Understanding exactly how long it takes for contributions to clear is critical under Payday Super 2026.
Incorrect fund details, invalid USIs or incomplete onboarding information can result in failed or returned payments.
Under the quarterly system, these errors may have been less visible or resolved over a longer timeframe. Under a pay-cycle model, data inaccuracies can quickly become compliance risks. Reviewing onboarding processes and fund validation procedures now can prevent issues later.
If payroll processing and payment authorisation sit with different teams, timing becomes more important.
Delays between payroll finalisation and payment release will matter more than they do today. Approval processes should be reviewed to ensure they comfortably support the seven-business-day requirement.
Super should be modelled as a pay-cycle liability rather than a quarterly expense.
Although the total annual super cost does not change, the frequency of cash outflows does. Forecasting should reflect that structural shift so liquidity planning remains accurate.
Payday Super 2026 does not require a new system. It requires a disciplined process.
Pay Cat payroll supports Payday Super within the standard pay run workflow, allowing employers to calculate and release super alongside wages in line with the 7-business-day requirement.
Super is processed as part of the normal payroll cycle, helping reduce the risk of missed deadlines or manual follow-up tasks.
📘 GUIDE COMING SOON
▶ Watch: Superannuation Essentials: Stay compliant and avoid costly mistakes
▶ Watch: Payday Super and how to automate your superannuation processes, Payday Super & Super Automation
Simplify Payroll. Stay Compliant.
Pay Cat helps Australian businesses take the stress out of payroll and stay fully compliant with modern awards. As Employment Hero Payroll experts, we set up systems that cut down on mistakes, save hours each pay run, and keep your business on the right side of Fair Work.