What You Need To Know About The Impending Superannuation Change
If you run a business, payday for your employees is about to evolve. And if you're an employee, the way your super is paid is getting an upgrade too — one that’s more aligned with financial security and prosperity within retirement.
Why?
Because on the 2nd of May, 2023, the Australian Government announced that from 1 July, 2026, employers will be required to pay superannuation on payday instead of quarterly.
This shift empowers employees by ensuring their retirement savings grow consistently, in an easily tracked way.
For employers, it’s an opportunity to navigate payroll processes with more clarity and intentionality. However it will impact cashflow and needs strategic planning and budgeting.
Essentially, each time you pay your employees their wages, you’ll also need to pay their superannuation. Employers must ensure contributions reach their employees’ super funds within seven calendar days of payday. Failure to comply could result in penalties under the updated framework, with charges applying to late or missed payments — escalating the longer the delay.
By embracing this change, businesses can maximise efficiency, stay attuned to evolving regulations, and contribute to a financial system that supports long-term abundance and financial freedom for employees.
Why Is the Legislation Changing?
Most employers do the right thing and pay super as required, but unfortunately, some don’t. This reform aims to address the longstanding issues of unpaid and underpaid super, ensuring workers receive what they’re entitled to — without limitation.
Shockingly, according to ATO data, unpaid super cost 2.8 million workers approximately $5.1 billion in 2021-22. That’s one in four workers, with the average underpayment of $1,810 per person. Those most affected include women, migrants, younger workers, those in insecure jobs, and lower-income earners, making this change a crucial step in creating a more aligned and equitable financial future for Australians.
What Will This Mean for Employees?
Employees will no longer have to wait months for their super contributions to be deposited. Instead, they’ll:
Receive their super on payday, ensuring their retirement savings grow in a more timely manner.
Gain clarity and ease in tracking their super contributions and retirement outcomes, as payments will align with each wage or salary cycle.
Benefit from more consistent contributions, potentially maximising their long-term super balance and leading to greater financial freedom in retirement.
How Will This Affect Employers?
This change requires significant adjustments to payroll systems and processes, hence the three-year lead-up. To stay ahead, here’s what employers can do to navigate the transition smoothly:
Transition to New Payroll Software – The Small Business Superannuation Clearing House (SBSCH) will be closing on July 1, 2026. This free ATO service has allowed employers to make a single payment for all employees, which is then distributed to their super funds. With payday super, employers must shift to more advanced payroll software that aligns with the new payment schedule.
Mark Your Calendars – Set a recurring reminder for each payday, ensuring super is processed alongside wages. With this shift, staying attuned to deadlines is crucial to avoid penalties.
Adjust Your Payroll Schedule – Ensure your payroll cycle is structured to align with super contributions. This may impact cash flow, so intentional planning is key.
Review Your Reporting Obligations – Employers must ensure their Single Touch Payroll (STP) reporting includes the necessary superannuation contribution details. Staying informed on compliance requirements will help avoid any missteps.
By embracing these changes early, businesses can maximise efficiency and ensure a seamless transition into this new era of superannuation payments.
If you’re feeling slightly underprepared, don’t worry — you have time. With just over a year until the transition, there’s plenty of room to navigate the shift smoothly. Additionally, the ATO is committed to providing guidance and support throughout this transition, and payroll software providers are expected to roll out updates to accommodate the new system well before the deadline.
With the transition set for July 1st, 2026, now is the time to adjust your payroll processes and prepare. The earlier businesses do so, the smoother the shift will be.
We’re always here to guide you through transitional times — this one included. If you need insightful and informational support, reach out. We’re here to help you transition seamlessly from quarterly to payday super contributions.
