Payday Super - Outline
/Payday Super
The Australian Government has announced that from 1 July 2026, employers will be required to pay employee super guarantee (SG) contributions at the same time as their salary and wages. But first, let us get you up to speed with the history of Super.
What is Superannuation?
Superannuation, commonly known as as ‘super’, is a system implemented by the Australian Government to help ensure the financial security of working Australians when they retire.
Superannuation works by having employers pay a given percentage* – from 1 July 2024 to 30 June 2025, a minimum of 11.5% – of their employees’ gross salary or wages into a nominated super fund. These payments are known as Super Guarantee (SG) contributions. The super funds then invest and manage the money until the fund owner reaches retirement.
Superannuation is a long-term investment that grows in value over time. An individual who has more contributed to their super fund during their work life will have an increased super fund balance available to them at retirement.
Super regulations set out criteria for:
Who superannuation guarantee contributions are required to be made for;
What earnings superannuation guarantee contributions are required to be made on;
What funds superannuation guarantee contributions can be made to; and
How frequently superannuation guarantee contributions must be made.
Additional superannuation-related information on can be found on the Australian Tax Office website.
Want to stay in the loop with our regular newsletter?
Each month we share business, bookkeeping, and QiBalance updates.
What is payday super?
The current form of super:
Currently, in order to avoid incurring a financial penalty known as the Super Guarantee Charge (SGC), employers must pay superannuation quarterly. The superannuation payment due dates for each quarter are:
The due dates indicate the date by which superannuation payments must be received by employees’ super funds. QiBalance Bookkeeping recommends lodging and paying for employee super no later than the 21st of each payment month to ensure that payments are received and distributed to super funds by the 28th.
Although quarterly superannuation payments are required, employers may choose to pay superannuation more regularly – for example, by making monthly super guarantee contributions. Additionally, some super funds, awards and contracts may require more frequent super guarantee contributions.
The future of superannuation: payday super
The Australian Government has announced that from 1 July 2026, employers will be required to pay employee super guarantee (SG) contributions at the same time as their salary and wages.
On 18 September 2024, the government announced:
Super contributions. Employers will incur a super guarantee charge (SGC) unless super guarantee contributions are received by their employees’ superannuation funds within 7 days of paydays, with some exceptions.
SGC updates. SGC will be updated and will become tax deductible, creating consistency with SG contributions, which business owners may already claim tax deductions for. Penalties and interest charged after the SGC assessment by the ATO will not be deductible.
SBSCH decommission. The ATO’s Small Business Superannuation Clearing House (SBSCH) – a free online service provided by the Australian Government that allows eligible businesses to pay super for all employees through a single payment – will be discontinued from 1 July 2026, as improvements in payroll software have made cost-effective, high quality options more accessible.
Fund regulation updates. Super funds must either allocate or return contributions within 3 business days, down from 20 business days.
STP updates. Employers will be required to use Single Touch Payroll (STP) to report both employee ordinary time earnings (OTE) and employee super liability, ensuring ease of SG identification.
Payday super has not yet been enacted into law.
What does this mean for employees?
The benefits of SG contributions being rolled into pay runs for employees include increases in both transparency and ease of super tracking. Because superannuation is reported to the Australian Taxation Office (ATO) via Single Touch Payroll, anomalies and errors will be easier to identify and correct.
Additionally, more frequent super payments mean that employees will be able to benefit from compounding super fund interest. Even relatively small increases in employee super fund balances make a difference over time as interest is generated.
What does this mean for employers?
The implementation of payday super means that superannuation payments will effectively be rolled into the periodic pay run process. For employers who pay wages weekly, fortnightly or monthly, superannuation guarantee contributions will be processed alongside employee wages.
Combining superannuation guarantee contributions with wage and salary pay runs will streamline the super process and minimise super-related liabilities and penalties.
QiBalance Bookkeeping is happy to help clients with any questions and concerns about the implementation of payroll super. We are here to develop a cashflow forecast for the change in Super payment regularity, helping you see clearly into your business finance future.
Keeping on top of super obligations
Employers should ensure that the cost of SG contributions is considered alongside the cost of wages and salaries when engaging employees. Additionally, businesses should be aware of SG regulations and maintain super compliance.
QiBalance Bookkeeping can help clients ensure compliance with payroll and superannuation regulations. We can also help businesses with creating a budget and tracking cashflow, to guarantee SG contribution payments are made correctly and on time.
Superannuation – an Australian timeline
In 1909, the foundations for retirement living in Australia were laid with the commencement of the Invalid and Old-age Pensions Act 1908. This Act replaced state-based pensions in New South Wales, Victoria and Queensland, and provided basic income support for those above the retirement age. From April 1909, Australian men over the age of 65 years were entitled to apply for an old-age pension.
From December 1910, women over the age of 60 were entitled to apply for an old-age pension under the Invalid and Old-age Pensions Act 1908.
In 1915, investment earnings of superannuation savings were made tax-free by the Income Tax Assessment Act 1915. However, superannuation was not widespread and was not transferrable between different employers. Consequently, until the mid-1980s, superannuation was generally limited to public servants and white-collar employees of large corporations.
In 1983, the Bob Hawke Labor Government expressed support for the principles of employee superannuation.
In 1986, the Australian Government with the Australian Council of Trade Unions (ACTU) in seeking a universal 3% superannuation contribution by employers, to be paid into an industry fund, in lieu of a wage rise for workers.
In 1992, the Paul Keating Labour Government made superannuation compulsory to ensure that working Australians saved for retirement. The policy aimed to address the challenges of retirement income by implementing mandatory employer contributions to super funds. This system boosted super coverage to 80% of employed Australians by 1993.
In 1999, self-managed super funds (SMSF) were introduced to allow small businesses and self-employed workers to establish and manage their own super funds.
In 2003, provisions came into force that allowed superannuation to be split between divorcing or separating spouses.
In 2005, employees became able to select their super funds for SG contributions.
‘Transition to retirement’ pensions became available, allowing workers above preservation age** to reduce working hours without reducing income. This is done by starting a transition to retirement income stream (TRIS), which ‘tops up’ part-time income with income from super savings.
In 2008, amendments removing same-sex discrimination from Acts governing superannuation schemes – such as payment of death benefits – began to be introduced.
In 2014, Australian workers who have not nominated a preferred super fund began receiving SG contributions into a fund chosen by their employer.
On 2 May 2023, the Australian Government announced the implementation of payday super from 1 July 2026 onwards.
On 18 September 2024, further details of payday super implementation were announced, as described above under the heading ‘The future of superannuation: payday super’.
Disclaimer: This blog post is a summary of a newsletter produced by the Institute of Certified Bookkeepers and distributed by members. All or any advice contained in this article is of a general nature only and may not apply to your individual business circumstances.
For specific advice relating to your specific situation, please contact your accountant or contact QiBalance Bookkeeping for further discussion.
The Institute of Certified Bookkeepers
Tel: 1300 856 181
Email: admin@icb.org.au
