Understanding the new Payday Super laws

The landscape of superannuation in Australia is set for a significant change. The Albanese Government has passed the Treasury Laws Amendment (Payday Superannuation) Bill 2025 (Payday Bill) and the Superannuation Guarantee Charge Amendment Bill 2025 (SGC Bill), introducing a suite of changes to Australia’s superannuation system. One of these reforms, Payday Super, is designed to help businesses comply with their superannuation obligations and enable employees to see their superannuation funds grow in real time.

Here, our experts explore what these changes mean for business owners, outline the necessary steps to prepare for 1 July 2026, and answer some pressing questions you may have about Payday Super.

What is the new Payday Super law?

From 1 July 2026, employers will be required to pay their employees’ superannuation guarantee (SG) contributions within seven business days of each pay cycle. This new reform, known as Payday Super, aims to end the current system in which superannuation is typically paid quarterly. The primary goal is to ensure employees receive their super entitlements more frequently, thus reducing the amount of unpaid super and improving retirement outcomes for all working Australians.

Key provisions of this new legislation:

• Superannuation payment timing: from 1 July 2026, employers must pay superannuation contributions within seven business days of each pay cycle, replacing the current quarterly payment requirement.
• Introduction of the Qualified Earnings concept: SG contributions attach to an employee’s Qualified Earnings, which include Ordinary Time Earnings (OTE), Salary Sacrifice Amounts, and other earnings currently captured under an employee’s wages for superannuation.
• Possible extensions: for the first year of implementation, employers may be able to avoid or reduce penalties associated with non-compliance with the new changes if they can demonstrate that they have rectified any superannuation contribution shortfall within 28 days from the quarter in which it was due
• Single Touch Payroll (STP): employers must disclose each employee’s Qualified Earnings and associated SG contributions.
• High Income opt-out: high-income earners may be able to opt out of receiving super guarantee from their employer to avoid exceeding the contributions cap by applying for an SG employer shortfall exemption certificate.

What is the rationale for the new laws?

The core idea of Payday Super is simple: super follows pay.

• For employers, this means aligning superannuation payments with their regular payroll cycles.
• For employees, it means their superannuation balance will grow more regularly, and they’ll earn interest sooner.

This change will apply to all businesses, regardless of size, and will commence from 1 July 2026. While details on transitional arrangements are still being finalised, the Federal Government has signalled a long lead time and extra resources to help businesses prepare for the shift.

What changes will employers need to make to their payroll systems?

Most modern payroll systems are already equipped to handle frequent super payments. However, employers will need to ensure their software is configured to process and pay superannuation with every pay run. This might involve updating software settings or switching to a system that supports seamless, automated super payments through a clearing house. Engaging with your payroll provider early will ensure a smooth transition and keep you compliant with the new laws.

What is the new Superannuation Guarantee Charge?

The Superannuation Guarantee Charge (SGC) itself isn’t new, but its application will change with Payday Super. Instead of being calculated quarterly, the charge will apply if super isn’t paid on an employee’s payday. The interest component of the SGC will be calculated from the payday itself, rather than the start of the quarter, making it even more critical for employers to pay on time.

What do employers need to do to prepare for 1 July 2026?

With the start date set for 1 July 2026, now is the time for employers to begin planning. Start by reviewing your current payroll processes and systems. It’s also a good opportunity to educate your team about how Payday Super will work and the benefits it brings.

What happens if an employer fails to pay super?

Currently, if an employer fails to pay the correct amount of super on time, they are liable for the SGC. This penalty exceeds the original super amount owed and isn’t tax-deductible. It includes the super shortfall, interest on that amount, and an administration fee. Under the upcoming rules, the same principle will apply, but the payment deadlines will be much shorter, tied to each payday.

If any of this information has raised questions about these superannuation changes or if you have another workplace matter that you need assistance with, please reach out to our Citation Legal team for a confidential discussion.

Disclaimer: this article is not to be relied upon as legal or taxation advice.

This article was written by Lauren Stariha, Senior Copywriter and Content Specialist and Lisa Qiu, Partner, Citation Legal.