Understanding Payday Super

Navigating the proposed Payday Super changes

Payday Super, whilst not legislated yet, is set to be one of the most significant changes to the way superannuation is managed in Australia in recent years. At AustralianSuper, we’re here to help you understand what the proposed Payday Super legislation means for your business, how it may affect your employer obligations, and provide tips on how to prepare for this change.

What is Payday Super?

The Australian Government is introducing major reforms to the Superannuation Guarantee (SG) system to tackle unpaid super and improve retirement outcomes for workers. It’s a proposed policy that requires employers to pay their employees’ SG contributions at the same time as their normal payroll cycle - essentially, on or before payday.

Key expected changes for employers

The proposed start date for Payday Super is 1 July 2026.

Employee choice of super fund

Employers can request a new employee's stapled fund details during onboarding, allowing them to show the employee their stapled fund before offering other fund options.

New SG shortfall assessment

SG shortfalls will be assessed based on whether contributions are received by the employee’s super fund within 7 days of payday (called the “Qualifying Earnings Day” or QE day), instead of quarterly.

Updated SG charge calculations

The SG charge now includes:

• Final SG shortfall amounts.
• Notional earnings (interest on unpaid amounts).
• Administrative uplift (penalty component).
• Choice loadings (if fund choice rules are breached).

Voluntary disclosure option

Employers can voluntarily disclose SG shortfalls before the ATO issues an assessment, potentially reducing penalties.

Stronger penalties for late payments

If SG charges remain unpaid 28 days after assessment, penalties of 25%–50% of the outstanding amount will apply, depending on prior compliance history.

Annual maximum contributions base

The cap on SG contributions will be calculated annually, not quarterly, simplifying compliance for high-income earners.

Proposed ATO approach to compliance in the first year
(1 July 2026 to 30 June 2027)

The Australian Taxation Office (ATO) is proposing a Payday Super compliance framework which may significantly change how the payment of super contributions are monitored.

Under this new proposed framework, employers will be assessed by the ATO and classified into three risk zones based on how promptly and accurately super payments are being made. The risk zones are intended to help the ATO target its compliance resources. The three risk zones are:

• Low-risk: Employers who make all required super contributions on time, or quickly correct any errors.
• Medium-risk: Employers who pay the correct contribution amount but not within the new Payday Super frequency (or do not correct errors quickly). These employers may have made all payments within 28 days after the end of the quarter. The ATO may investigate whether there is an SG shortfall.
• High-risk: Employers who fail to make sufficient contributions or leave shortfalls unresolved for 28 days after the end of the quarter. The ATO will investigate the SG shortfall.

Employers may move between risk zones during the year. The ATO proposes to investigate periods where an employer is classified as either medium or high risk. However, if the ATO obtains information that an employer has an SG shortfall, it is required to apply the law—regardless of the employer’s risk classification.

This proposed approach is designed to encourage ongoing compliance with Payday Super legislation and timely correction of errors.

Please note that the information above is based on draft ATO guidance and may be subject to change.

Qualifying earnings (QE)

Qualifying earnings is a newly introduced term defined as the earnings used to calculate an employee's SG contributions. The rules for this are being simplified, but they will still use the current earnings base, called Ordinary Time Earnings (OTE). OTE includes:

• The regular earnings as defined by the current SG rules.
• Any portion of earnings that an employee has sacrificed for extra superannuation contributions through salary sacrifice.
• Payments that are specifically included as part of salary or wages.

Frequently asked questions

Learn more about Payday Super

We’ll continue to keep this page updated as more information is available.

Treasury factsheet

Payday Super factsheet - pdf