Time’s running out faster than most business owners realise. From 1 July 2026, Australian businesses will need to pay superannuation contributions at the same time as wages – and honestly, this represents one of the most significant changes to our super system in decades.

The Government introduced the Treasury Laws Amendment (Payday Superannuation) Bill 2025 and the Superannuation Guarantee Charge Amendment Bill 2025 on 9 October 2025, fundamentally changing how we’ll all handle super payments.

What’s striking about this reform is its scope – it affects every Australian business with employees, and the compliance requirements are considerably tighter than what we’re used to.

Why PayDay Super is happening (and it’s not pretty)

The numbers tell a concerning story. According to the Australian Taxation Office, unpaid superannuation reached a shocking $3.6 billion in the 2020-21 fiscal year. That’s billions in retirement savings that never reached workers’ accounts, even though most employers are genuinely trying to do the right thing.

Mary Delahunty, CEO of the Australian Superannuation Fund Association (ASFA), called the impending reform a “game-changer” that will guarantee “millions of Australians get the superannuation they deserve and profit from having their super invested sooner and more often.”

Treasurer Jim Chalmers emphasised the benefits for workers: “Paying super on payday is part of the government’s efforts to ensure Australians earn more, keep more of what they earn and retire with more as well.” Government calculations suggest a 25-year-old median income earner currently receiving wages fortnightly and superannuation quarterly could be around $6,000 (or 1.5%) better off at retirement under the new system.

The big changes you need to understand

Here’s what’s actually changing – and it’s more than just payment timing.

Super payments will align with wage payment schedules

Rather than the current quarterly payment cycle, you’ll need to sync superannuation contributions with your regular payroll schedule. Pay your employees weekly? You’ll make super contributions weekly. Fortnightly payroll? Super payments need to match. As Super payments are currently paid quarterly, this means most businesses – assuming a fortnightly payroll cycle will make superannuation payments 22 times more often than they currently do!

Understanding the strict 7-day payment window

With PayDay Super, you’ll have a stringent 7-day window to ensure contributions reach employees’ super funds. The thing is, this timing begins from the day wages are paid, not when you initiate the payment. If the super fund doesn’t receive contributions within this timeframe, you’ll face the revised superannuation guarantee charge, which includes daily interest charges.

Business groups are expressing serious concern about this tight timeframe, with many calling it “unfair” to small businesses. The current quarterly system provides some flexibility, but this 7-day rule creates strict compliance requirements that leave little room for error (or banking delays, or processing hiccups).

The ATO’s Small Business Superannuation Clearing House is shutting down

In addition, there’s another, associated change that will catch approximately 250,000 small business owners off guard – the ATO’s Small Business Superannuation Clearing House (SBSCH) is closing. New registrations closed on 1 October 2025, and existing users have until 30 June 2026 before the service disappears completely. Ref: Australian Taxation Office

The SBSCH has been remarkably convenient – you make one electronic payment covering all your employees’ different super funds and the clearing house distributes it. Simple. Free. But it was designed for the old quarterly super payment system, and it simply doesn’t align with the new payday super reforms.

Andrew McKellar, CEO of the Australian Chamber of Commerce and Industry, hasn’t minced words: “We are concerned the government has not given enough consideration to the pressures small businesses are facing right now.” Ref: SmartCompany

The government’s own Impact Analysis estimates the SBSCH closure will increase the average annual regulatory burden on affected employers by $1.2 million. Ref: PMC

Without the clearing house, you’ll need to either subscribe to commercial clearing houses (which charge fees), use your payroll software’s super payment features (if it has them), or work directly with individual super funds. Frankly, none of them offer the same combination of simplicity and zero cost that the SBSCH provided.

New superannuation guarantee charge rules
The government has also announced a new superannuation guarantee charge system that will make non-compliant employers face more severe consequences. Employers who don’t deposit contributions into employees’ super funds within seven days will be slapped with daily interest charges – a big change from the existing system, where fines are usually only levied after quarterly due dates have passed.

The expensive mistakes employers are already making

Even under the current system, we’ve seen numerous businesses making costly errors with their superannuation payments. Let’s walk through the most common ones.

Overlooking quarterly deadlines

One of the most frequent mistakes is merely overlooking the quarterly superannuation payment deadlines. Currently, Super contributions need to be paid by the 28th day following the end of each quarter. A lot of employers wrongly think these deadlines coincide with BAS lodgment dates, which results in late payments and triggers the superannuation guarantee charge.

Miscalculating super obligations

The present superannuation guarantee rate is 12% (which came into effect July 2025), but this should be applied to ordinary time earnings, not necessarily total payments. We’ve found that a lot of employers incorrectly include or exclude certain payment types, resulting in under or overpayments.

Incorrectly labelling employees as contractors

This is a big issue for many businesses – incorrectly labelling employees as contractors to dodge superannuation obligations. The ATO and Fair Work Australia are cracking down hard on these arrangements. Even if a worker has an ABN and sends your business invoices, they could still be treated as an employee when it comes to superannuation.

In a landmark case from 2023, a medium-sized construction company was ordered to pay over $450,000 in unpaid superannuation and penalties after wrongly treating 28 workers as contractors over three years.

Not keeping good records

The ATO mandates that businesses keep records showing how they calculated superannuation and proof of payment for at least five years. As PayDay Super makes payments more frequent, it’ll be even more important to have a robust system for record-keeping because the number of transactions will increase dramatically.

PayDay Super Consequences

An extra $6,000 for average workers when they retire

Treasury figures show that a 25-year-old on a median income could be around $6,000 (or about 1.5%) better off when they retire under the new system, because of the compounding growth on contributions that will be invested earlier and more often.

Increased paperwork for small businesses

Business NSW CEO Luke Achterstraat said: “Employers will have to make up to 13 times as many payments, process up to 13 times as many transactions, and ultimately bear up to 13 times the cost to make sure super gets to their employees’ accounts.” (Note this multiple  relates to a weekly pay cycle, which increases Super payments from four per year, to 52 per year!)

There’s a good chance that this increased frequency will necessitate more staff time or resources for superannuation compliance.

Software and transaction fee increases could happen
Industry experts like Tony Greco, senior tax adviser at the Institute of Public Accountants, suggest small businesses could face higher subscription costs as payroll software companies change their pricing to reflect PayDay Super requirements. Transaction fees from clearing houses and payment processors could increase as payment frequency changes from quarterly to matching pay cycles.

Getting your business ready for PayDay Super

Evaluate your existing payroll system’s abilities

Many older systems were built for quarterly superannuation payments and may struggle to efficiently manage the increased frequency demanded by PayDay Super. Important features to consider are automated superannuation calculations, batch processing of payments, integration with superannuation clearing houses, and comprehensive reporting capabilities.

Plan for possible price hikes

Start budgeting now for possible price hikes that PayDay Super could bring – not just direct costs like transaction fees and upgrading software but also indirect costs like more administrative time and potential cash flow impacts.

Think about how you manage your money

If you run a business that makes most of its money during certain times of the year, you’ll need to think carefully about cash flow management. Consider setting up automatic transfers that take the correct superannuation amount from each payroll run, creating a dedicated superannuation reserve.

Discuss compliance with your Keypoint Accountants

It’s crucial to seek expert advice during this transition. Arrange a meeting with us to talk about how these changes will affect your business directly and what strategies might help reduce disruption.

How this impacts your financial outlook

With less than nine months to get ready, companies have the chance to evaluate their current procedures, make necessary adjustments, and build strong compliance systems. Those who start preparing now will not only dodge non-compliance fines but may also get ahead of the competition by improving operational efficiency.

Here’s a quick comparison:

Present System (Until 30 June 2026)

• Payments made every quarter
• 28 days after the end of the quarter to make payment
• ATO Clearing House available
• Penalties applied after quarterly due date

PayDay Super (Starting 1 July 2026)

• Payments made along with wage cycle
• 7 days from wage payment for super to reach fund
• ATO Clearing House closing
• Daily interest charges after 7-day window

The countdown to PayDay Super has started. Businesses that prepare now will be in the best position to successfully navigate this major change – and honestly, that preparation window is closing faster than most people realise.

Get ahead of PayDay Super changes. Contact us here to review your payroll setup and stay compliant before July 2026.