You may have started hearing about the Australian Taxation Office’s (ATO) upcoming Payday Super changes—and if you’re a small business owner, they’re worth paying attention to. Set to take effect starting 1 July 2026, these changes will alter the way employers pay superannuation contributions for their employees.
While this is designed to benefit workers, it also has important implications for business owners, particularly when it comes to payroll, cashflow, and compliance. Understanding what Payday Super involves and preparing as early as now can save your business time, money, and stress.
What Is Payday Super?
Payday Super is a government initiative aimed at improving the timeliness and accuracy of Superannuation Guarantee (SG) contributions. Its main goals are to:
- Reduce unpaid or late super payments
- Give employees faster access to their retirement savings
- Provide greater transparency and real-time tracking of contributions for both employees and the ATO
In simple terms, Payday Super means paying super each time you run payroll instead of quarterly. While this is good news for employees, it removes the quarterly buffer many small businesses rely on and calls for more disciplined payroll processes.
Important Changes to Consider
For small business owners, the transition to Payday Super will bring some key adjustments. Here’s a detailed comparison of the current process versus the changes:
| Requirements | Current position | From 1 July 2026 |
| Deadline for SG payments | SG contributions are due within 28 days after the end of each quarter (due dates: 28 October, 28 January, 28 April, 28 July).
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SG contributions must be paid to employee-nominated super funds on each pay run pay date, with funds received by the super fund within 7 business days. |
| Calculation of SG amount | SG is currently calculated as 12% of ordinary time earnings (OTE). | SG is calculated as 12% of qualifying earnings (QE). QE includes OTE, salary sacrifice contributions, and other relevant payments.
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| Reporting SG payments | OTE and SG liability are reported through Single Touch Payroll (STP).
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QE and SG liability are reported through STP. |
| ATO Small Business Super Clearing House (ATOSBSCH) | Existing users may continue to use ATOSBSCH until 30 June 2026. | ATOSBSCH will no longer be available. All employers must transition to an alternative payment method to pay employee super.
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| Late payments and Superannuation Guarantee Charge (SGC) | SGC applies if SG contributions are not received within 28 days of the end of the quarter. The employer self-assesses SGC, calculated on salary and wages with 10% interest per annum, plus a $20 admin fee; it is not tax deductible. | SGC applies if SG contributions are not received within 7 business days of payday. The ATO will assess the SGC, calculated based on QE, including interest compounded daily at the ATO’s General Interest Charge rate. An administrative fee applies and the SGC is tax deductible.
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| Penalties | Maximum of 200% of the SGC may be applied, which can be remitted in full or in part. | Penalties are 25% or 50% of the unpaid SGC, depending on any prior penalties
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What This Means for Small Business Owners
For small to medium enterprises, the transition to Payday Super will affect several areas:
- Cashflow Management
Rather than paying a lump sum quarterly, super contributions must now be paid more frequently. This means adjusting budgets and ensuring sufficient funds are available for each pay run. For businesses with tight cashflow, planning is crucial. - Payroll Processes
Many employers will need to update payroll systems to accommodate more frequent super payments. Most modern accounting and payroll software allows for this, but it’s important to test processes and ensure your systems can handle Payday Super requirements. - Record Accuracy
Accurate employee records are more important than ever. Mistakes in pay rates, leave, or salary sacrifice arrangements can lead to rejected super contributions or penalties. Reviewing payroll details ahead of time can prevent costly errors. - Compliance and Reporting
Using accounting and bookkeeping services for small businesses can help ensure your organisation stays compliant. Trusted accounting experts who are familiar with STP reporting and SG obligations can reduce the risk of late payments and penalties.
What Employers Can Do to Prepare for Payday Super
- Transition Early
Don’t wait until the last minute. Set up your systems now to handle Payday Super. - Consider Alternative Clearing Houses
If you currently use SBSCH, explore other super payment options available in payroll software. - Review Payroll Records
Check that employee details, super fund information, and earnings are correct to reduce the risk of rejected contributions. - Budget for More Frequent Payments
Adjust cashflow forecasts to reflect smaller but more frequent super contributions. - Seek Expert Advice
Engaging bookkeeping, accounting, or CFO services for small businesses can save time and ensure smooth compliance.
How Accounting Services for Small Businesses Can Help
Small business owners, especially those in the medical sector in Sydney or managing IT teams, often find it challenging to keep up with frequent payroll changes. Using accounting and bookkeeping services for small businesses ensures your super payments, STP reporting, and financial records are accurate, reducing risk and freeing you to focus on growing your business.
Payday Super is a significant reform, but with the right preparation, small and medium business owners can transition smoothly. Reliable accounting support services can help you fulfil the Payday Super requirements efficiently by updating payroll systems, reviewing employee records, and maintaining accuracy and compliance.
If you’re unsure how these changes will impact your business or if you need help in preparing for Payday Super, contact Keeping Company today for a free assessment call. From bookkeeping for medical practices in Sydney to providing accounting services for IT professionals, we offer an extensive range of tailored accounting, bookkeeping, and CFO services for a wide variety of small to medium businesses.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice, and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
Ryan Miller is the founder of Keeping Company, May 2011 – Present. A tie-loathing, people person with an entrepreneurial spirit. Ryan’s drive to modernize the accounting industry coupled with his desire to help people succeed saw the birth of Keeping Company. Focusing on the SME space, KeepingCo. empowers business owners by providing high-quality end-to-end accounting and business advisory services.
Ryan took his first Accounting role working at KPMG. He went onto further refine his skills as a Chartered Accountant taking the role of Director of a Chartered Accounting firm in Erskineville.
Ryan is a fully qualified Chartered Accountant and a member of the Institute for Chartered Accountants Australia and New Zealand. He is also a Registered Tax Agent and holds a Bachelor of Commerce from the University of South Australia.