In October 2025, the Federal Government (Government) introduced a long awaited legislation, known as Payday Super, involving changes to the payment timing rules from 1 July 2026 and how employers pay employee Superannuation.
On 9 October 2025, the Federal Government introduced Treasury Laws Amendment (Payday Superannuation) Bill 2025 (Cth) (Bill) into the Commonwealth Parliament (Parliament).
At the date of this publication, the above new superannuation legislation had not yet been passed by Parliament
In short, the proposed changes relate to two main superannuation changes:
Payday Super
The new superannuation rules, effective from 1 July 2026, require superannuation contributions to be paid by employers within seven business days of each payday – replacing the current quarterly payment model.
The change in timing of such payments seeks to protect and grow the retirement incomes of millions of Australians. In the 2024 Australian Taxation Office (ATO) annual report, the amount of superannuation guarantee (SG) debt on hand was approximately A$2.2 billion by approximately 89,300 employers.
To assist with the transition, the ATO has published a draft Practical Compliance Guide PCG 2025/D5 (PCG 2025/D5) dealing with the ATO compliance approach for the first year. Employers will be assessed as low, medium or high risk based on efforts to meet the new timing rules for payment of superannuation obligation.
The ATO’s guidance (PCG 2025/D5) states that taxpayers who pay on time and accurately, or promptly without any errors, will generally be considered low risk and face limited ATO examination.
Employers who don’t update their payment processes or leave unpaid superannuation contributions may be targeted for an ATO investigation.
Qualified earnings
The Payday Super framework uses a single earnings base called qualified earnings to calculation of the individual SG amounts needed to avoid an SG shortfall and to determine the amount of SG charge if an employer has an SG shortfall.
Qualified earnings are a new concept and include:
- Ordinary time earnings (OTE);
- Salary sacrifice superannuation contributions; and
- Other amounts which are currently included in an employee’s salary or wages for SG.
Each employer should review the new earnings base, in light of the current payroll system’s operation.
To transition to the new Payday Super regime, employers may need to take the following immediate actions:
- Review payroll systems to ensure they can support Payday Super;
- Engage with software providers and clear houses to prepare for the Small Business Superannuation Clearing House decommissioning;
- Update processes and educate internal stakeholders in the business; and
- Monitor ATO guidance and legislative updates, including the finalisation of the ATO approach in PCG 2025/D5.
The Payday Superannuation measures will apply to all businesses in Australia and require immediate attention from employers to consider the cashflow implications these measures may have on capital allocation and overall cashflow.
Superannuation Guarantee Charge (SGC) – modified rules from 1 July 2026
Under the current system (effective until July 2026), if an employer pays superannuation late, for example, if an SG contribution does not reach an employee’s super fund within 28 days of the end of a quarter, the employer must pay a non-deductible SG charge and lodge an SG Statement.
From 1 July 2026, an employer will be liable for the superannuation guarantee charge (SGC) unless their employee’s superannuation fund receives their employee’s contribution within the required timeframe, generally seven business days after payday.
In our second publication will outline the amended SG charge rules taking effect from 1 July 2026.
Next steps
For more information or guidance on the new Payday Superannuation measures, please contact your local Nexia advisor.
From existing payroll system to cashflow management and beyond, our experts are here to help you understand and navigate the changes and existing polices, ensuring you can continue to move forward confidently.
