Big Changes to Superannuation Payments from 1 July 2026
The Treasury has released draft legislation for a major change to how employers pay superannuation—known as Payday Super. If the proposed reforms go ahead, employers will need to pay super much sooner than they do now, bringing it in line with employee pay cycles.
What's Changing?
From 1 July 2026, employers will be required to pay their employees’ super within seven calendar days of payday. This is a significant shift from the current system, where employers have until 28 days after the end of each quarter to make their super contributions.
To support this change, the draft legislation introduces a new concept called “qualifying earnings” (QE)—similar to ordinary time earnings. The day an employee is paid is known as the “QE day”, and this starts the seven-day countdown for super to be paid.
New Penalties for Late Payments
If super contributions aren’t received by the employee’s fund within seven days of the QE day, employers may face the Superannuation Guarantee Charge (SGC)—unless certain exceptions apply, such as a two-week grace period for new employees.
The penalty system is also getting an overhaul:
- A new interest rate will apply to late payments, replacing the current 10% nominal rate with the ATO’s General Interest Charge (GIC).
- The flat $20 administration fee per employee per quarter will be scrapped. Instead, there’ll be a 60% uplift based on the total shortfall and interest.
Although employers won’t be required to submit SG statements anymore, they may still need to lodge voluntary disclosures to access discretionary reductions in penalties.
Deductions and Penalties
Both on-time and late super contributions—along with SGC payments—will remain tax-deductible. However, penalties will not be deductible.
There’s also a proposed new penalty system for unpaid SGC:
- If the charge remains unpaid 28 days after the due date, the ATO must issue a notice to pay.
- A 25% penalty will apply initially, increasing
- to 50% for repeat offences within two years.Unlike the current system, these penalties cannot be remitted by the ATO.
Easier Correction Process
Late contributions will be automatically applied to the oldest outstanding QE day, streamlining how employers fix past shortfalls.
Changes for Small Business
Another big change: the Small Business Superannuation Clearing House will be retired from 1 July 2026. This means small businesses will need to pay super directly to employees’ funds rather than through the clearing house.
What This Means for You
These proposed reforms are a significant shift in how super is managed. Employers—especially small businesses—should start reviewing their payroll systems and processes now to prepare for the change.
