The end of quarterly super? Payday Super rules explained

For decades, employers have paid wages weekly or fortnightly and paid super once a quarter. That quarterly buffer is ending. From 1 July 2026, Payday Super requires employers to pay their employees' super guarantee (SG) at the same time as their wages. The contributions then have to reach the employee's fund within a short window after payday.

The aim is to reduce unpaid super and give employees contributions sooner. For businesses, it means less cash flow flexibility and much less room for payroll errors.

Key dates

The super guarantee rate is 12%. Businesses that used the ATO's Small Business Superannuation Clearing House should also note that it closes on 1 July 2026, so switch to a payroll or clearing house solution before then.

From OTE to qualifying earnings

Under the new rules, SG shortfalls are calculated on qualifying earnings (QE) rather than ordinary time earnings (OTE) alone. How each pay item is categorised now matters much more. Review how your payroll system treats:

• overtime and penalty rates
• bonuses and commissions
• salary sacrifice arrangements
• allowances
• director fees and payments to working directors

How STP Phase 2 raises the stakes

Single Touch Payroll Phase 2 already gives the ATO a detailed, pay-by-pay view of your wages. With Payday Super, the ATO can compare wages reported through STP against contributions received by funds almost in real time. Mismatches caused by incorrect pay item mapping or late payments will be picked up quickly.

Businesses most affected

Businesses that run payroll with manual approvals, spreadsheets, delayed reconciliations or tight week-to-week cash flow are likely to be most affected. SMSF trustees and employees with salary sacrifice arrangements should also monitor contributions closely against their caps.

The cash flow impact

For many small businesses, the timing of quarterly super payments has provided some cash flow flexibility. Under Payday Super, these amounts are paid with every pay run, so we recommend including SG in your weekly cash flow forecast well ahead of 1 July.

Common mistakes to avoid

• relying on payroll software without reviewing the pay item setup
• leaving clearing house processing times out of your payment schedule
• holding incorrect or missing fund details for employees
• not reconciling contributions after each pay run

Practical preparation checklist

1. Review your payroll software settings and update to the latest version.
2. Audit pay categories and pay items against the QE definition.
3. Test that your STP Phase 2 reporting is accurate.
4. Update your cash flow forecast to include SG with every pay run.
5. Confirm your super clearing house's processing times.
6. Verify employee fund details and stapled fund information.
7. Set up an internal process for handling payroll exceptions.

Payday Super is more than a compliance update. Treat it as a payroll system review, a cash flow planning exercise and a compliance project at the same time.

This article contains general information only and does not take your personal circumstances into account. Tax and superannuation rules change, and some measures discussed may be subject to legislation. Speak with a registered tax agent before acting.