Payday Super will apply from 1 July. How can you prepare?

On 9 October, the Government introduced Payday Super legislation. Employers are currently only required to pay super quarterly, but the landmark change will mean businesses will be required to pay super on payday from 1 July 2026.

Key changes for small businesses include:

• Employers must pay superannuation guarantee (SG) at the same time as salary and wages.  
• The Small Business Superannuation Clearing House (SBSCH) will close to new registrants from 1 October 2025, and all users from 1 July 2026.
• SG contributions will generally need to arrive in employees’ super funds within 7 business days of payday. If the amount is not received by the super fund within the required timeframe, employers will be liable for the superannuation guarantee charge (SGC).  

While entities like the Council of Small Business Organisations Australia (COSBOA) and professional accounting body CPA have welcomed the changes, they’ve called for more realistic timeframes to allow businesses to prepare.

“We’re trying to build a complex new system on foundations that aren’t ready,” says COSBOA Chair Matthew 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.”

Meanwhile, private tech companies are seizing the opportunity to innovate on products to assist with concerns around potential admin and penalty risks. Payroll and HR solution Employment Hero has teamed up with Ozedi and Zepto to build a solution that removes lag and “keep SMBs out of hot water”. The ‘super clearing tool’ removes the manual steps and delays that currently sit between payroll and super funds to give employers a clear proof-of-payment trail within the seven-day window.

“The final Bill expects SMBs to get Payday Super right from the outset, even while parts of the system that employers rely on are still being upgraded,” says Employment Hero CEO Ben Thompson.

“At the same time, hundreds of thousands of SMBs will need to move off the ATO’s Small Business Superannuation Clearing House (SBSCH), set to close 1 July 2026. That’s a big ask, especially when you consider the 60 per cent increase in admin overheads and $124,000 cashflow impact the average SMB will face on day one.”

ATO Deputy Commissioner Emma Rosenzweig says there are steps businesses can take to get ahead of the changes in order to be ready for 1 July.

“Start making your super payments more frequently. You may currently pay your employees their super every quarter, but you can switch now to make these payments weekly, fortnightly or monthly,” says Rosenzweig.

“Check your employees’ super funds details are up to date. An easy way to tell if you need to make updates is if you’re receiving error messages about rejected contributions. Keeping accurate records now will save you time down the track.”

Rosenzweig also recommends reviewing internal governance assurance processes around super reporting, as “good payroll governance helps your business run smoothly”.

She also recommends starting to look for alternatives if you’re using the ATO’s Small Business Super Clearing House and looking at cash flow to understand how moving to paying super more frequently will affect your business.

“We know the challenges that small business face, and we’re working closely with tax professionals, digital service providers and super funds to help prepare small business employers for the 1 July start date,” says Rosenzweig.

The ATO says that the proposed compliance approach will recongise that employers who try to do the right thing from 1 July 2026 to 30 June 2027, and resolve any issues quickly, should not be the focus of ATO compliance action.

The ATO is welcoming feedback by 7 November.

Find out more about Payday Super here.

Photograph by Vojtech Okenka / Pexels.

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