The Council of Small Business Organisations Australia (COSBOA) and Australia’s largest professional accounting body CPA Australia have both called on the government to adopt a more realistic approach to its implementation of payday super, despite supporting the need for reform.
COSBOA Chair Matthew Addison said that while the organisation supports payday super, the government has not properly accounted for timeframes and costs.
“Small businesses want to do the right thing, but they need time to prepare, support to manage the compliance costs, and fair treatment when system failures occur that are outside their control,” says Addison.
The proposed legislation will require employers to ensure superannuation contributions reach employees funds within seven calendar days of each pay cycle. It is set to begin 1 July 2026.
COSBOA warns the proposed timeframe is unworkable without significant upgrades across payroll software, clearing houses, super funds, and the Australian Taxation Office (ATO).
“We’re trying to build a complex new system on foundations that aren’t ready,” says Addison. “Every payroll provider, super fund and gateway needs to redesign and test their systems before launch, and that takes years, not months. The government’s own papers say it can take up to three years to implement. Right now, we have eight months.”
CPA Australia Superannuation Lead Richard Webb said the reforms were important, calling the current requirement on employers to only pay super contributions every quarter “outdated and troublesome”. But he warns that the new system may impose stress on small business cash flow.
“Some small businesses will face significant cashflow challenges as they adjust to the new regime,” he said. “This may be another compliance headache that many small businesses will struggle to cope with in such a short space of time.
“We are pleased that the government has heard our calls for more proportionate penalties for small businesses who fail to immediately comply with the new rules.
“We welcome the assisted compliance period contained in the draft guidance released [on October 9] by the ATO, but note that it is not the same as if the Bill formally allowed businesses time to adjust.”
Both organisations have encouraged the government to delay the rollout to give the superannuation industry and businesses sufficient time to prepare to meet the new requirements.
For exclusive hospitality news every Tuesday and Thursday, subscribe here or follow us on LinkedIn and Instagram.
Laura Box
