10 October 2024
The Government recently announced further details around new payday super legislation1. While not yet law, the first step employers can take to get prepared for the proposed 1 July 2026 start date is to understand what’s changing and how it might affect your business.
First proposed in the 2023-24 Budget, payday super is the latest measure in a number of reforms that the Government is planning to help strengthen the superannuation system, ensuring Australian workers can enjoy a more dignified retirement.
Key changes for employers
Under payday super, employers will be required to pay their employees’ superannuation guarantee (SG) contributions at the same time as their salary and wages.
This means the minimum frequency of SG payments will increase from four times a year (quarterly), affecting every business differently depending on whether their pay cycle is weekly, fortnightly or monthly.
It's proposed that each time an employer makes an Ordinary Time Earnings (OTE) payment to an employee there will be a new 7 calendar day ‘due date’ for contributions to be processed and arrive in the employees’ super fund.
There will be some exceptions to this rule, including payment to new starters and out of cycle payments.
Updated Superannuation Guarantee Charge
Changes to the design of the Superannuation Guarantee Charge (SGC) have been proposed to align with the increased frequency of payments, and to ensure employees are fully compensated for any delays. SGC will be payable from the day after the 7-day due date.
| Current SGC components | Proposed SGC components |
|---|---|
|
Plus additional interest and penalties after assessment of SGC by ATO |
The SG charge will be tax-deductible, however any penalties and interest after assessment of SGC will not be.
Closure of the ATO Small Business Superannuation Clearing House
To align with the proposed payday super start date, the Government announced it would close the ATO’s Small Business Superannuation Clearing House (SBSCH) from 1 July 2026.
Currently used by many eligible employers across the country, the proposed change would require these businesses to transition to an alternative clearing house solution. While the Government is expected to engage with affected businesses to support the transition, there are steps businesses can take to get prepared.
What can you do?
Before payday super comes into effect, there’s an opportunity for businesses to prepare for a smooth transition:
- Stay informed
Keep up-to-date on the latest super changes, by visiting our Changes to superannuation webpage. The Government has advised that consultation will continue through the second half of 2024 so there may be further changes. - Plan for the new payment frequency
Consider the impacts on business cashflow of super being paid at the same time as your regular pay cycle. - Review processes and systems including clearing houses
Assess your current payroll systems and processes to identify if any updates need to be made to meet the new requirements. If you currently use the ATO Small Business Superannuation Clearing House you may wish to start looking at alternatives.
We’re here to help
As Australia’s largest super fund2, we work with businesses of all sizes, from small and local organisations to medium and large enterprises, across a wide array of industries, to help make super as easy as possible.
Employers registered with us gain access to QuickSuper3, a clearing house that is quick, free and secure.
- Source: Treasury, 2024, Payday superannuation design details to ensure super is paid on time, accessed 26 September 2024
- APRA Quarterly superannuation fund level statistics June 2024. Released October 2024.
- QuickSuper is a registered trademark and a product owned and operated by Westpac Banking Corporation ABN 33 007 457 141. Westpac’s terms and conditions applicable to the QuickSuper service are available after your eligibility for the clearing house service is assessed by AustralianSuper. A Product Disclosure Statement (PDS) is available from Westpac upon request. AustralianSuper doesn’t accept liability for any loss or damage caused by use of the QuickSuper service and doesn’t receive any commissions from Westpac if employers use this service. You can choose to make your contributions using a different service, but it needs to meet the government’s minimum data standards, visit ato.gov.au
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/pds or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
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