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Understanding Payday Super
The Key Change
Superannuation guarantee (SG) contributions must now be paid at the same frequency as wages, rather than quarterly. Each contribution must reach an employee's nominated fund within 7 business days of payday, subject to limited exceptions such as for newly commenced employees.
Alongside this change in timing, the earnings base used to calculate SG has also changed. Contributions are now based on an employee's qualifying earnings rather than ordinary time earnings. Qualifying earnings is a broader measure that combines ordinary time earnings with other amounts previously factored into an employee's pay for SG purposes, including commissions and salary-sacrificed super contributions.
What Has Not Changed
- The SG rate: Still 12% of the relevant earnings base.
- Who you pay super for: The same eligible employees, including independent contractors engaged mainly for their labour.
- Most payment systems: Existing payroll platforms and clearing arrangements largely continue to operate, with one significant exception — see below.
If a Payment Is Missed or Late
Where a contribution does not reach an employee's fund within the required timeframe, the super guarantee charge (SGC) applies, and several aspects of it have changed:
- The charge is now assessed directly by the ATO, rather than self-assessed by the employer through a lodged SG statement.
- It is calculated on qualifying earnings rather than salary and wages.
- Interest now compounds daily at the ATO's general interest charge rate, rather than the previous flat 10% per annum.
- A new administrative uplift amount replaces the former flat administration fee, reflecting the cost of enforcement. It can be reduced for employers with a clean compliance history or those who lodge a voluntary disclosure.
- Unlike previously, the SGC is now tax deductible.
Penalties have also been simplified: rather than a penalty of up to 200% of the SGC that could be partly or fully remitted, penalties are now fixed at 25% or 50% of the unpaid charge, depending on the employer's prior compliance history.
Before and After: A Quick Comparison
| BEFORE 1 JULY 2026 | AFTER 1 JULY 2026 | |
|---|---|---|
| Payment frequency | Quarterly | Every payday |
| Payment deadline | 28 days after quarter end | 7 business days after payday* |
| Earnings base | Ordinary time earnings | Qualifying earnings |
| Late-payment interest | Flat 10% per annum | Compounds daily (general interest charge rate) |
| Super guarantee charge | Not tax deductible | Tax deductible |
| Non-compliance penalty | Up to 200% of the charge | 25% or 50% of the unpaid charge |
| Fund allocation window | 20 business days | 3 business days |
| Single Touch Payroll (STP) | Report either OTE or super liability | Report both qualifying earnings and super liability |
| Small Business Superannuation Clearing House | Closed to new users on 1 Oct 25, existing users had access to the service until 30 June 26 | SBSCH is no longer available |
*Limited exceptions apply, such as for newly commenced employees.
Sources & References
Australian Taxation Office: About Payday Super
Australian Taxation Office: Cost of Living
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