25 May 2026
From 1 July 2026, the introduction of Payday Super will change the Maximum Contributions Base (MCB) from a quarterly to an annual limit. The MCB will also increase to $270,830 for the 2026–27 financial year. This means that once an employee's qualifying earnings (QE) reach $270,830, employers are not required to make further Super Guarantee (SG) contributions for the remainder of that financial year.
Key MCB Impacts for high-income earners (effective 1 July 2026)
- Annual cap application: The MCB will be calculated based on the annual concessional contributions cap.
For 2026–27 the MCB is $270,830. - Year 1 overlap risk – employers will still make quarterly SG contributions for the final quarter of FY26, as required under current rules, which means some contributions could be received as late as 28 July.
- From 1 July 2026, employers begin making more frequent contributions under Payday Super. This means an employee could receive up to 15 months’ worth of contributions within a single financial year which could push them over the concessional annual cap.
- Faster maxing out: high-income earners with salaries significantly above $270,830 will reach their maximum employer contribution ($32,500) much faster, potentially by the end of the first or second quarter, rather than having contributions spread evenly throughout the year.
- For higher income employees on salary packages inclusive of super:
- More super may be paid earlier in the financial year than before.
- This can reduce take-home pay in the initial months.
- Once contributions reach the Maximum Contributions Base (MCB) and stop, take-home pay should increase.
- Overall, total remuneration remains the same, but the take home pay fluctuates due to the timing of super payments.
- Multiple employer exemption: If an employee has multiple employers and expects to exceed the $270,830 threshold, they can apply to the ATO for a shortfall exemption certificate to opt out of SG with one or more employers.
- Early cutoff impact: If the $270,830 threshold is hit early in the financial year, the employee may not receive any further employer-paid super for the rest of that year.
Next steps
- Employers should update payroll systems to track employee earnings on a financial year-to-date basis rather than quarterly to apply the new annual MCB.
- High-income earners should review their total contributions from 1 July to monitor if they are exceeding the concessional contributions cap ($32,500), which could trigger additional taxes.