IR Alert: New Pay Day Super to Commence July 2026

The "payday super" legislation, announced in the 2023-24 Budget, in league with a companion Bill introduced today, creates "a strong incentive for employers to make super contributions for their employees at the same time as they pay the employee's qualifying earnings", according to the explanatory memorandum.

Read full release here

What does this mean for Employers

1. Timing of contributions to superannuation - same time as salary/wages paid
   
   From the start of the measure, employers will be required to pay their employees’ SG at the same time as their salary and wages. Employers will be liable for the superannuation guarantee charge (SGC) unless contributions are received by their employees’ superannuation fund within the required timeframe, generally 7 business days after payday.
   
   

2. Superannuation contributions will generally need to arrive within 7 days of qualifying earnings (QE) payment to an employee
   

   QE is a new concept which includes: 

   - ordinary time earnings (OTE)

   - salary sacrifice superannuation contributions

   - other amounts which are currently included in an employee's salary or wages for SG

   
   

3. Extended timeframe to pay contributions will apply in certain circumstances
   For example when an employer is contributing to a superannuation fund for the first time for an employee (including new employees), when payments of QE are made to an employee outside their regular pay cycle and where exceptional circumstances have impacted the ability of multiple employers on large scale to pay superannuation contributions.
   
   

4. Implications for failure to pay contributions in full and on time
   Where employers fail to pay contributions in full and on time, they are liable for SGC. Full details here. 

   
   

What Employers need to consider

• Financial Planning - Businesses might need to reassess their financial strategies to accommodate the shift from quarterly to pay-day contributions. Get qualified advice.

• Cash Flow Management - Gain a clear understanding of impacts on cash flow planning to ensure that sufficient funds will be available on each pay cycle to meet super contributions. Talk to a qualified Accountant.

• Administrative Process and Changes - Check if payroll systems and processes need updating to comply with the new requirements and consider associated costs.

• Compliance and Penalties: -  be mindful of the increased obligation for accurate and timely super payments that may lead to the need for improved compliance measures to avoid penalties.

• Change Management - Consider how your business will adapt to the changes. Phased implementation strategies may be required in the leadup to 1 July 2026.

Need help?
Members that have questions or would like more information, please contact Jim Challis, QTA's Employment Relations Manager, on 07 3394 4388  |  M 0408 411 231  |  jim@qta.com.au