The Australian Government has proposed a major reform to the superannuation system known as Payday Super. If passed, this legislation would require employers to pay Superannuation Guarantee (SG) contributions at the same time they pay wages, rather than quarterly.
What’s Changing
Under the proposed reform, SG contributions would need to be received by the employee’s super fund within 7 calendar days of each payday. This shift is intended to reduce unpaid super, improve retirement outcomes through earlier compounding growth, and increase transparency and accountability for employers.
What Counts as ‘Payday’
Payday refers to the date an employer pays Ordinary Time Earnings (OTE), including regular wages, commissions, bonuses, and salary sacrifice contributions. Each payday would trigger a new 7-day deadline for SG contributions to be received by the employee’s fund.
Employer Obligations
If the legislation passes, employers will need to:
- Ensure SG contributions are received by the employee’s fund within 7 calendar days of payday
- Use updated payroll systems that report both earnings and super liability via Single Touch Payroll (STP)
- Prepare for increased administrative frequency and potential cash flow impacts
Penalties for Late Payment
Employers who fail to meet the new deadlines may face a Superannuation Guarantee Charge (SGC), which includes unpaid amounts, interest, and administrative penalties. Additional penalties may apply if the SGC is not paid within the required timeframe.
Exceptions
Some flexibility is expected:
- New employees: Employers may have up to 14 days to remit SG contributions
- Irregular payments such as bonuses: SG could be paid on the next regular payday
- Exceptional circumstances may allow for extended timeframes
Preparing for the Transition
Although the legislation has not yet passed, employers are encouraged to begin preparing by:
- Reviewing payroll systems and pay codes
- Consulting with software providers to ensure STP updates are ready
- Training payroll teams on new definitions and reporting requirements
- Assessing cash flow implications of more frequent payments
Legislative Status
As of October 2025, the Payday Super reform has been introduced to Parliament through the Treasury Laws Amendment (Payday Superannuation) Bill 2025. While the government has committed to implementing the changes from 1 July 2026, the legislation is still under review and has not yet been passed. Employers should stay informed and prepare for compliance, pending final approval.
Disclaimer
This article is intended for general informational purposes only and does not constitute financial, legal, or tax advice. Employers should seek professional guidance tailored to their specific circumstances and monitor legislative updates to ensure compliance with any future changes.
