What small businesses need to know about Payday Super

Payday Super reforms will mark a significant change in how and when superannuation payments are made with the aim to protect Australian workers from instances of lost or unpaid super.

From 1 July, Australian employers will be required to pay superannuation at the same time as wages, or within seven business days, replacing the current quarterly payment approach.

For small businesses, the change means potential impacts to cashflow as they will need to make super payments at more frequent intervals, and take the time to get their systems ready before 1 July.

What changes on 1 July?

Right now, employers generally need to pay super into their employees’ nominated superannuation fund on a quarterly basis. While some employers already make these payments at or around the same time as their employees’ wages, from 1 July, this will become a requirement for every business with one or more employees.

There are limited exceptions, including the first contribution for a new employee, which will generally need to be made within 20 business days.

In line with these changes, the ATO Small Business Superannuation Clearing House is closing on 30 June, impacting small businesses who currently use it to make super payments today.

Why the government is changing the rules

The change was announced by the federal government in the 2023-24 Budget, with the goal to tackle unpaid and underpaid super, improve retirement outcomes and make it easier for workers to spot late or missing payments.

According to the Federal Treasury, more frequent payments should mean fewer super liabilities building up on employers’ books.

The ATO is the primary enforcement agency for compulsory super and so is also responsible for implementing the new rules.

What it actually changes for employees and employers

For employees, the payday super change is mostly about timing and visibility. Super should land sooner, making it easier to see whether contributions are being paid properly and to raise a problem earlier if they are not.

For employers, the practical change is payroll timing and cash flow. If wages are paid weekly, super becomes a weekly outgoing. If wages are paid fortnightly or monthly, super does too. There will be more frequent super calculation and processing, and changes to payroll approval timing.

That leaves less room for admin delays, missing fund details or an end-of-quarter scramble.

3 things employers should be doing now

1. For employers, the first step is sorting payroll. Business.gov.au says employers should check with their payroll software provider when Payday Super functionality will be available.
   
   If you use a clearing house or super fund portal, you should also check whether it is ready and whether anything needs to change at your end. If you use the ATO Small Business Superannuation Clearing House, you will need to switch to a different payment facility before it closes on 30 June 2026, in line with Payday Super changes.
   
   Commonwealth Bank will be relaunching distribution of Colonial First State’s Essential Super for business to its small business customers, which offers a clearing house payment facility. This means small businesses can continue to make super contributions in a single payment to multiple funds.
   
   You can register your interest here.
   
   
2. The second step is records. This is a good time to make sure employee records are up to date, including super fund details.
   
   
3. The third step is cash flow, and for some businesses, this may be a significant shift.
   
   Instead of planning for a larger quarterly super payment, businesses will need to ensure they have sufficient cash available each pay cycle.
   
   Business.gov.au also notes there’s no need to wait until July 2026 to start paying super every payday if your payroll systems are already set up to do so.
   
   For businesses that experience short-term timing gaps as they adjust, flexible options such as business overdrafts can help manage cash flow across pay cycles during the transition to Payday Super.

The one deadline not to miss

Businesses that still use the ATO Small Business Superannuation Clearing House will need to move to a different provider. The SBSCH will not be available from 1 July 2026.

Under the new rules, what happens if super is paid late?

Fair Work says additional charges apply if super is not paid on time, and late payment may also breach the Fair Work Act or an applicable award or enterprise agreement.

According to the ATO, the updated Super Guarantee framework includes provisions that mean employers who pay super late will pay daily compounding interest, an administrative charge, and extra penalties if an assessed amount is not paid within 28 days.

It underscores that value of preparation to make sure your payroll and cashflow are ready to go when the change comes at the start of the new financial year.

The bottom line

For Australian small businesses, the best course of action is simple: get ready now. That means checking systems, cleaning up records, planning cash flow and making sure any old payment set-up, especially the SBSCH, is not left until the last minute.