At L Jack & Associates, we understand the realities of running a small business — balancing staff obligations, cash flow, and compliance, often with limited time and resources. From 1 July 2026, an important change to superannuation rules will affect how and when employers pay super for their employees.
This change, known as Payday Super, became law on 4 November 2025. Its purpose is to reduce Australia’s unpaid superannuation gap and ensure employees receive their super contributions closer to when they are paid.
What Is Changing?
From 1 July 2026, employers will be required to pay Superannuation Guarantee (SG) contributions at the same time as wages, rather than quarterly. Super must be received by the employee’s fund within seven business days of each payday.
If super is paid late, the Superannuation Guarantee Charge (SGC) will apply. This includes:
· the outstanding super amount
· interest, and
· an administration fee
Once the SGC has been assessed, additional interest and penalties may apply if the liability is not paid in full. While SGC amounts will generally be deductible, penalties for late payment will not be.
Small businesses should also note that the Small Business Superannuation Clearing House (SBSCH) will be retired from 1 July 2026. If you currently use this service, you will need to transition to an alternative clearing house or payroll-based solution before the new rules commence.
The Government estimates that paying super earlier could increase an average employee’s retirement balance by around $7,700 over time.
What This Means for Small Businesses
While Payday Super represents a shift in timing, it does not change how super is calculated. For many small businesses, the move to more regular payments may actually simplify payroll and reduce compliance pressure.
Potential benefits include:
· Reduced quarter-end pressure by aligning super payments with payroll
· Lower compliance risk, with earlier detection of issues through ATO data matching
· Improved transparency for employees, supporting trust and retention
· More predictable cash flow, with smaller, regular payments instead of large quarterly amounts
The ATO has indicated it will take a supportive, risk-based approach during the first year, focusing on education and helping businesses transition smoothly.
How to Prepare Your Business
Although the changes don’t start until July 2026, early preparation will help ensure a smooth transition.
We recommend small business owners:
1. Review payroll software - Most commonly used systems such as Xero, MYOB and QuickBooks already support payday-aligned super. Confirm your setup and ensure it is correctly configured.
2. Understand your pay cycles - Identify how often employees are paid and allow for the seven-business-day payment window after each payday.
3. Update internal processes - If payroll is handled in-house, ensure staff are aware of the new requirements. The ATO provides free resources and webinars to assist.
4. Plan for cash flow changes - Transitioning to more frequent super payments ahead of time can help reduce cash flow pressure when the rules commence.
5. Monitor compliance regularly - Ongoing checks will help ensure super payments are being made accurately and on time.
If payroll is outsourced, we recommend contacting your provider early to confirm they are ready for Payday Super.
Our Advice
Payday Super is more than a compliance update — it is an opportunity for small businesses to modernise payroll processes, reduce risk, and demonstrate a strong commitment to employee entitlements.
With the legislation now passed and the commencement date approaching, now is the right time to review your systems and plan ahead.
If you would like assistance reviewing your payroll arrangements or preparing for Payday Super, the team at L Jack & Associates is here to help. Please contact us to discuss how these changes apply to your business and what steps you should take next.