FY2027 Updates: Payday Super

"Payday Super" is known as a major Australian government reform, effective from 1 July 2026, requiring employers to pay superannuation contributions at the same time they pay salary and wages, rather than quarterly.

Key Deadlines and Dates

• 7-Day Rule: Super contributions must be received by the employee's fund within 7 business days of payday.

• Fund Deadline: Super funds must allocate contributions to member accounts within 3 business days of receipt (down from 20).

  
  

Major Changes for Employers

• Payment Frequency: Super must be paid alongside every pay run, whether weekly, fortnightly, or monthly.

• Calculation Change: Super will be calculated as 12% of Qualifying Earnings (QE), a new term replacing "Ordinary Time Earnings" (OTE) to include regular wages and salary sacrifice amounts.

• Clearing House Closure: The ATO Small Business Superannuation Clearing House (SBSCH) will close on 1 July 2026. Existing users must find an alternative payment method before this date.

• Reporting: Employers must report both QE and total super liability through Single Touch Payroll (STP). 

  
  

Exceptions to the 7-Day Rule

Certain situations allow for extended due dates:

• New Employees: First contributions for a new hire are due within 20 business days of their first payday.

• Out-of-Cycle Payments: Contributions for bonuses or commissions are generally due on the same day as the next regular pay cycle's contribution.

• Exceptional Circumstances: The ATO may grant extensions for significant disruptions like natural disasters. 

  
  

Non-Compliance Penalties

If super is not received within the 7-day window, employers become liable for the Superannuation Guarantee Charge (SGC), which includes: 

• The unpaid super amount.

• Daily compounding interest from the date of the missed payment.

• An administrative uplift of up to 60% of the shortfall.

  
  

Tips and Checklist for all employers:

1. Review Cash Flow: Prepare for more frequent outflows of cash as the "quarterly buffer" disappears. if you are out of control with your cashflow and need some advices on cash flow management, Profit Tracking Advisory team are here to help.

   
   

2. Update Software: Ensure your payroll software is updated to calculate and report under the new "Qualifying Earnings" code.

   
   

3. Find a New Clearing House: If you currently use the SBSCH, transition to a private clearing house or an integrated payroll super service (e.g., via Xero, MYOB or QuickBook).

   
   

4. Validate Data: Regularly check that employee super fund details are accurate to avoid rejection errors.