Understanding Payday Super

Good morning, everyone. It's great to see you all, and thank you for joining.

My name is Innes Villex. I'm the chief executive of Australian Industry Group, and it's my great pleasure to host today's webinar along with AustralianSuper on a very important issue for employers right across the country.

We've got a terrific turnout today, so thank you for joining us. It's obviously an issue of great interest, maybe some concern to employers across the country.

I'd first like to, on behalf of all the participants, acknowledge the traditional owners of the country throughout Australia and their continuing connection to land, waters, and community. And we pay our respects to their cultures, country, and elders past and present.

There's a lot to work through over the next hour and we're going to be joined by two experts from AustralianSuper who will be helping take us through that really important issue. Before I start, I'd just like to ask you all if you could have a look at the QR code that is coming up in this slide. This is a QR code for the Australian Industry Group's annual survey, taken at the end of every year, of business leaders' expectations. This gives us a lot of information that we can use in dealing with policy makers right around the country at federal and state level and to help us inform, you know, ourselves as well on what's concerning you, what your issues of concern are, what your expectations are for the year ahead. It's a very important survey that we do, of members. It's confidential, but if you could please, it'll take you about 10 minutes to do the survey. Not long at all. If you could just take a snapshot of the QR code, that'll take you to the survey, and then please fill it in and send it back to us. That would be really much appreciated, and it does help us to help you navigate what are challenging and often turbulent times that we're going through at the moment as we look into 2026.

We're particularly interested in your views on tax, on employment, and investment, and there are a few other issues in there as well, but these are all very important issues that business and government are grappling with.

Let's turn to the issue that we're here for today, the issue of Payday Super and the introduction of Payday Super. What is happening is that, from the 1st of July 2026, employers will be required to align the time they pay super with the time that they pay wages. This is a new obligation on employers, and it replaces the longstanding quarterly contributions that employers have had to comply with, up until now. It is a, a very important change and it has legal implications and tax implications, for businesses.

These changes have been passed. They are law. They are not a proposal of government. They were passed by the parliament some weeks ago without much debate. Both sides of parliament supported the change to, to introduce Payday Super. So these commence from the 1st of January next year. sorry, the 1st of July next year, 1 July 2026. Our guests from AustralianSuper will explain Payday Super and its implications in some more detail, but we are well aware and we have put to government, in our consultations with government that obviously this will have implications for business and for employers. moving to seven- moving to having to pay within seven days of the pay cycle is a big change. It will have cashflow implications for businesses, particularly small businesses. What it means in essence under this change, the new laws mean that superannuation contributions will have to be paid into an employee's superannuation account within seven business days after Payday. Within seven business days after Payday.

Now practically speaking, employers will find this difficult to do unless they pay the superannuation entitlements at the same time as they pay wages. This is a significant change because for 30 years or more, superannuation has been able to be paid quarterly, so this is, this is a significant shift. In our conversations with the government, they gave two very clear reasons for introducing this change, and they took this to the last election. one reason that they gave was to reduce the levels of unpaid superannuation or non-compliance of payment of superannuation and non-compliance with obligations. And the government calculated that there was more than $5.2 billion, billion with a B, in unpaid super in 2023, 2024, that financial year. so that's a lot of unpaid super that the government is trying to, ensure is paid. and secondly, they're...... this.

The second, rationale was that they wanted to make sure that the super contributions goes to employees, not to employers. The government calculated, you know, in its consultations with us that, a, the average 25-year-old will, gain an additional $6,000 in today's, dollars when they retire as a result of this change. So, they see it as a very important change, for workers and the workforce. We've made the government very well aware that this will have cash flow implications for businesses of all sizes, but particularly for smaller businesses who've quite often worked on the quarterly contributions timetable, and that it also comes at a time of considerable uncertainty and, adversity for business. We're all aware of the current difficult business conditions, that we're all facing at the moment. The government was very clear, in the consultations, and we consulted broadly with the Treasury, and the Assistant Minister, the Assistant Treasurer Daniel Merlino, who's responsible for these changes. the government, was aware of the impacts but, was very clear that the benefits for workers, were paramount to them. we did make some positive changes during the consultations with the government, and as part of those changes, you know, we, we looked at, we were able to get some concessions, around, recognition for natural disasters and how, you know, different circ stances could impact the payment. And we were also able to get some changes made to the calculations around for the days for making contributions.

Originally, it was, there was proposals for seven days, but it's now seven business days. but the package, as I mentioned, was passed without really any significant debate in the parliament. Now, we, at the Australian Industry Group, sent members a detailed advice, last month, on the changes, but today is an opportunity for you, to hear from, experts in the field as well around the impact of the changes, what impact it they will have on you and on super as well, as well. And we encourage you to participate today. If you have any questions, please, go to the Q&A function at the bottom of your screen to type your questions in, and our, principal National Workplace Relations Policy Adviser, Scott Barclay, and we'll be on hand after the presentations to, go through, some of the questions and to get those answered for you. we will do another session, next year, just to remind people in the lead-up to the introduction of Payday Super, and, you know, your, your questions today can help inform that session as well.

So with that context, let's turn to today's presentation. We're joined by, Luke Fraser, who's the Head of Workplace Partnerships for Australian Super, and Katie Pittman, who's the Senior Business Service Manager at Australian Super. I'd like to welcome both Luke and Katie. Now, just for your background, the Australian Industry Group has a very longstanding relationship with Australian Super. We are one of the two trustees of Australian Super along with the ACTU, and, I, am a member of the board of Australian Super and have been for 11 years. I chair the People and Culture Committee and I also am a member of the Investment Committee. So it's a longstanding relationship that we have had since the formation of Australian Super in 1998. So hopefully today we'll give you some practical, useful, information on how super obligations are changing and how practices and procedures, for paying super need to change. It's an important change, and as I said, there are legal obligations to ensure that employers comply. So with all of that background, I'm going to hand over now to Luke and Katie to take you through how Payday Super will actually work and, look at some of the implications both for the system itself, for employers, and for employees. Luke, Katie, over to you.

Oh, fantastic. Thanks, Ines. And, and look, it's terrific to be here. As you mentioned, Ines, Australian Super and the AI Group have been working closely, for decades, and I was pleased when I saw the registration list to be able to look down and see not only many businesses that I know work closely with Australian Super, but also many that I've worked with personally, myself. So my name is Luke Fraser. I'm the Head of Workplace Partnerships at Australian Super, and the Workplace Partnership Team provides services to over 480,000 businesses. That's across all industries, so whether that's manufacturing, transport and logistics, technology, hospitality, agriculture, and beyond.

Today, I am coming from Queensland, and Katie is joining us from New South Wales, but we have a national team across the country, so wherever you are, we're here to support you. Now, Payday Super. Well, it's certainly been on our mind for at least the last two years, and we really want to make sure that we can support businesses to navigate this new legislation, which, as you've just heard, is landing on 1 July 2026.

So with that said, let's get into it. So, look, Innes, thanks for your acknowledgement of country earlier. AustralianSuper also acknowledge the traditional custodians of the land on which we meet. Now, we're going to be throwing a lot of information to you today. hopefully, you find it interesting and useful, but the point I need to make is the content wasn't designed for your individual or business-specific circ stances in mind. So please don't act solely on the information you hear. It's important to get your own advice.

We've got a jam-packed agenda. I'm going to talk a bit about the evolution of the superannuation landscape, then we're really going to drill into Payday Super, including the enforcement and compliance, that Innes mentioned earlier, what implementation is going to look like in practice, and, and most importantly, how people on the call can start to prepare your businesses and get ahead of the curve. So, superannuation is, is really undergoing a period of significant change right now. But reflecting on that, it actually has been for the last 20 years. There's always been change. I remember when I first started in superannuation 20 years ago, I would go to the mail room, I would pick up the checks, then I would go to the fax machine and get the printout with all of the employees' details and all of the contribution amounts.

Then came Choice of Superfund legislation, which saw the introduction of things like superannuation clearing house systems and the start of the digitization that we see today. The establishment of SuperStream data and payment standards followed, and finally, we had Single Touch Payroll introduced, which saw employers have to report PAYG and superannuation guarantee data to the ATO every pay cycle.

So now, we're right on the cusp of a new era, ushering in what I see as the largest transformation to date. This includes, like you've heard, Payday Super, which sees the payment of super contributions move from quarterly to in line with every Payday. At the same time as that, we're also seeing SuperStream version 3.0. This brings enhanced data standards, smarter error messaging, and real-time fund validation to streamline payments and really try and reduce mistakes.

We're seeing the introduction of new technology, like the new payments platform, which will drive real-time payments. And all of this means that employers are going to need to adapt, adapt quickly, to stay compliant. So, I'll touch on some things at a high level now, then Katie will take them, take you through them in more detail after that.

We really see five key changes that businesses need to be aware of, and the first one is the obvious one, that this is the third time we're talking about it, is you need to pay super in line with Payday rather than quarterly. And, and Katie will touch on some of the exceptions or extensions that exist there.

We also see this new concept of qualifying ear- earnings, which Katie will talk about in a bit more detail.

Third, we see enhanced reporting requirements for Single Touch Payroll, meaning that employers will need to report qualifying earnings and the superannuation liability to the ATO at the same time as they report salary and wages. And the ATO will use that STP data to monitor compliance with Payday Super in real time and compare it to what superannuation funds are sending through when there's new reporting requirements for super funds as well.

And fourth, a super guarantee charge applies if superannuation isn't received by the fund in an allocable format within seven business days. The late payment penalty will generally be about 25% of the outstanding SGC amount, but that will increase to 50% if the outstanding SGC amount, if you've been liable for the same penalty in the previous 24 months.

And fifth, there's a, a few things wrapped in here. The, the SuperStream upgrades that I spoke about, but they also coincide with the closure of the ATO's Small Business Clearing House. So the key SuperStream changes include the enablement of real-time payments via the new payment platform, a new error messaging framework which will support faster and clearer error messaging within the systems, a new member verification capability for first-time contributions, and fund validation service improvements with early alerts on fund changes like mergers, which we know can be a frequent source of frustration.

So to take a look at each of these in more detail, I'll hand back to Katie, and, yeah, I'll be back soon to talk as well.

Thanks, Luke, and thanks to AR Group for bringing us all together today.

So my name is Katie Pittman, and I'm the senior business services manager here at AustralianSuper. As Luke mentioned, there are five major updates under Payday Super that we're going to cover off today. Our goal in this session is we really wanna make these Payday Super changes practical to you, and ultimately, we want you to walk away with a clear plan, so those few actions that'll matter most now, any risks to catch early, and where to go for help. So let's jump in.

So first key change in Payday Super from the 1st of July, 2026 changes when you pay super. So instead of quarterly, super must now be paid on Payday and received by an employer's super fund within seven business days. And this is a huge shift, so let's look at what this means.

So this seven-day rule, under Payday Super, every time you pay wages, you'll also need to pay super. The super contribution must reach the employee's fund within seven business days of Payday, and this is called the qualifying earnings day, or QE day. A little bit more on that later. The main principle behind the seven-day rule is that super contributions must be received and ready to be allocated within seven business days. So that means that your data needs to be complete and accurate, and if the data is incorrect or incomplete and the payment is rejected, it cannot be allocated to the employee, and that deadline isn't met. Now, as Luke hinted, there are some exceptions to this rule, and the most important one is for new employees or employees who change funds during their employment.

So for these cases where you're contributing to a fund for the first time, you'll have up to 20 business days for that payment to be received at the super fund. So it's going to give you some extra time to set up that new account and ensure that the details are correct. Extensions will also apply in special circ stances, so, this is what Innes was talking earlier, like natural disasters, or it could be when a fund becomes non-compliant or is unable to accept contributions. And there's also going to be extended contribution period applying to out-of-cycle earnings, so things like bonuses.

Now, super of these payments could be paid on the next QE day, with the funds paid to the employee's nominated super fund within seven business days. Now, what counts as a business day? So, a business day is any day that isn't a Saturday, Sunday, or a public holiday for the whole state or territory. So if there's a holiday that only applies to part of the state, so there'll be, for example, the Royal Hobart Show Day, it will still count as a business day. Another thing to remember is that the payments are only considered on time when the super fund receives it, so not when that payment is sent. Those late payments can trigger the super guarantee charge, so you'll need to make sure that your employee details are correct and payroll systems can handle these deadlines. But later on, we'll be sharing a new development that will help with making those faster payments and help stay compliant.

Now, the second key change on the Payday Super is this term qualifying earnings or QE. Now, qualifying earnings is this new term for payments that you'll make to employees that count towards calculating their super guarantee, or SG, under Payday Super. So, you might be wondering how this new term fits in with ordinary time earnings, or OTE, which has been a standard for years. Now, QE is the new standard specifically for the Payday Super model, so where super is paid at the same time as salary and wages. Now, for most employers, this move to qualifying earnings actually won't affect how much super you're already paying for your staff, as QE and OTE are very similar. However, QE now includes all commissions, so even for those paid out for work outside of ordinary hours. Now previously, ATO accepted these were not OTE for super purposes.

The other thing to note here is that sometimes a payment might fit into more than one category of qualifying earnings. So for example, a commission could also be considered part of ordinary time earnings. In those cases, the payment is only counted once, so you don't need to double up when they're calculating the super. Now, with all these changes, it's really important to start reviewing your payroll systems now and cross-checking that employer contributions to make sure that they, they ensure that the correct super guarantee rates and amounts are applied. So these will help you stay compliant and avoid penalties when Payday Super begins.

Now, the third... With the introduction of Payday Super, the third key change is how employers will need to report their super information. So previously, you would have reported either ordinary time earnings or super liabilities through Single Touch Payroll. However, with these new changes, employers must now report both qualifying earnings, those QE, and the super liability for each employee through Single Touch Payroll. So this change is important. It's going to help ensure that the super contributions are calculated accurately for each pay cycle and not just at the end of quarter, and it's also going to provide greater transparency for both your employees and the regulators, helping everyone see what's being paid and when. Now, if you don't report qualifying earnings or super amounts through STP on time, or if that information is wrong, you could get fined.

So the ATO is expecting reports to be on time and correct, so any mistakes or delays may lead to penalties or checks on your payroll. So to get ready, you'll need to ensure that your payroll systems can capture and report QE and super liability through STP and review your payroll processes to make sure all super payments are calculated and reported correctly. Now let's look at some enforcement and compliance, so what's required to stay on track and what happens if you don't.

So, understanding these rules will help you avoid penalties and keep your business compliant. So, the fourth change and one of the biggest Payday Super changes is how penalties apply when payments are late or incorrect. So this is where that super guarantee charge, or SGC, comes in. So let's break down what that means.

So what is the super guarantee charge? So, the super guarantee charge applies if you don't pay the minimum super guarantee amount in full and on time or if you don't follow fund choice rules. So under Payday Super, this now applies per day, Payday and not quarterly. So how is the SGC calculated?

So the charge has four parts to each Payday. Firstly, there's the final SG shortfall. So this is the unpaid super amount after considering any late contributions. The second is notional earnings, so that's the interest charged on unpaid amounts.

Third is the administrative uplift, so this is an extra charge based on compliance history. So the amount can vary depending on the employer's history of meeting super guarantee obligations, and it can be reduced if a voluntary disclosure is made.

And the fourth and final is choice loadings, so this is where an employer has not complied with the choice of fund rules. Now, under Payday Super, the penalties have also increased. So the ATO will calculate your SGC shortfall, and if you don't pay, you can face penalties up-... of, Luke mentioned before, 25%, or 50% if you have received a notice in the preceding 24 months. So just to ca- recap there, previously the SGC applied quarterly, but from the 1st July 2026, it applies every Payday if deadlines aren't met. Now, the ATO is introducing a compliance year for that first year of Payday Super during which they're going to be more lenient with those who are making some sincere attempts to follow the rules.

So they've shared a draft practical compliance guideline that explains how they're going to focus their compliance checks in that first year. So it outlines three categories, low, medium and high. In short, the ATO's going to focus on higher risk cases. So while a business that demonstrates genuine efforts to comply, they'll be considered lower risk. So for example, lower risk applies to employers who make those gen- honest, genuine efforts to follow the rules and correct any errors promptly. So it could be, for example, if an contribution is rejected by a fund, but the employer remakes the payment quickly, the ATO's going to generally view that as favourably.

Now, medium compliance risk is for employers who are still transitioning to Payday Super, but experiences some compliance issues. So an example here is an employer who moves to monthly contributions, but some payments are late due to reporting errors, or if sufficient contributions are paid quarterly despite a weekly payroll cycle. Now finally, high compliance risk is for the employers who fail to meet their obligations, or show poor compliance behaviour. So this includes situations such as like where contributions are rejected and not corrected, or when an employer completely stops making contributions altogether.

So I think the key takeaway in this first year is that the ATO's going to consider your intent and actions, and understands that mistakes can happen. Now, what's going to matter is how you respond to those mistakes. So if you do make an error such as an inadvertent mistake, the key is to correct it as soon as reasonably practicable. So making those genuine efforts to comply and correcting mistakes quickly will help you stay in that low risk category. However, repeated or uncorrected errors, or failing to make contributions will place you in that high risk category and may result in stronger penalties.

So the key message here, really start preparing today and get across all of your payroll processes. Don't leave your payroll teams behind, so make sure that their processes are strong and your team knows how to respond quickly if errors do occur.

Now with these first four changes, we've covered the what s of Payday's rules, new terminologies and employer obligations. Now let's talk about how we're going to make that work in practice. So I'm now going to pass back across to Luke, and he's going to talk through some of the changes and improvements that make these obligations hopefully easier to meet. Thanks, Luke.

Thanks, Katie. And yes, we'll, we'll move on to number five, the fifth big change you need to be across, and if you remember at the start that was SuperStream and also the closure of the ATO Small Business Clearing House. And we'll start with the ATO Small Business Clearing House. So as mentioned before, it is closing. In fact, it's closed to new employers already. The Clearing House is made available free of charge for businesses with under 20 employees. The fact of the matter is the platform was not going to be fit for purpose for a Payday Super environment. So if you are one of the 200,000 plus employers using the Clearing House, our message is, don't worry, there are other options out there. So for example, AustralianSuper and many other funds offer a free clearing house, and we're going to be transitioning to a new enhanced offer from around February next year, and that will include a range of new features to help employers attain one Payday compliance, but two, manage their data and onboarding a lot more effectively. So when you are starting to think about what your Payday Super plan is, it's worth starting to consider now what your options are if you're using the ATO Small Business Clearing House. Good first steps would be speaking to your super fund, AustralianSuper or other, or your payroll provider and start to understand what options are going to be available from them. The good news though is, is that there are plenty of offers in market that will not cost you anything extra.

Now connected to clearing houses are, are payments, and there are going to be options for faster payments of contributions, and the one that everyone is talking about right now is the new payments platform. It's a real-time payments platform used across Australia, and real-time payments have really become part of everyday life in Australia with almost $7 billion moving through the new payments platform each day.

NPP improves how quickly a contribution can be received by your employee's superannuation fund. So to give you an example, if you've ever sent money to a family member or a friend using PayID or Osko, you've seen how quickly those payments are received. It's like sending a tech- text message, quick, simple and instant. It moves money between banks in seconds, not days, and it works 24/7, even on Christmas Day, which isn't too far away, which is a bit scary. And look, another new functionality that will help make things easier is the new member verification request, which Katie, you're across that. I'll hand over to you to talk through it.

Thanks, Luke. So another feature being rolled out as part of Payday Super is called that member verification request or MVR. Now this is going to help employers check if an employee's super fund is ready to receive payments before any money is sent. So-So here how- here's how that's going to work. So before making a super contribution, your payroll system can send a quick message to the super fund, and that message is going to check three things. So it's going to check if the fund's unique code, or USI, is valid.

Number two, it's going to check if the fund is open and able to accept payments. Three, and most importantly, do the employee's details, like their name and date of birth, match what the fund has on record? So if there's a problem, you'll be able to find out straight away and you can fix it before making the payment. It's going to mean fewer mistakes and less chance of payments being rejected, and it's going to help meeting those new tighter deadlines around paying super. Another Payday Super functionality on the way will be enhanced error messaging. So error messages will be getting clearer and more helpful when you pay super. So in the past, in the current SuperStream world, if there's a problem with a super payment, you might get a vague message like, "Contribution could not be processed," and it's made it really hard to know what's gone wrong. Now the system will leave you more specific messages. So for example, if you forgot to enter a surname, the message will say, "Surname is mandatory and must be provided." Now, these clearer messages are going to make it much easier to fix those mistakes again quickly and ensure that those payments aren't delayed.

Another major improvement is the upgrade to the fund validation service. So this is a tool that sits behind your payroll system or clearinghouse, and it helps give you early warnings about key super fund changes, so things like mergers, to avoid- to avoid those contribution issues or rejections. And what's really important to note with these enhanced error messages is there's going to be different levels of errors.

So there are some that might need to be fixed before you can submit the payment. Others may still process, but you might need some fixing to meet compliance. And others are just going to be a warning or information, so it's not going to stop the payment going through. However, we really want to encourage everyone at the moment to review their error and warning messages you're currently receiving through SuperStream for existing staff. So right now, some payments might go, still go through even if there's a warning or a minor issue, but after the 1st of July, 2026, those same issues could cause payments to be rejected. So if you're able to check and fix those now, you're going to avoid any surprises and reduce the risk of any rejected payments once Payday Super is up and running. Now, potential impacts.

We're going to start to look at some of these practical impacts of Payday Super, especially for employers. So here are a few areas we wanted to focus on. So firstly, independent contractors.

So whether Payday Super applies will depend on the terms of that contractor's agreement. So if the contractor is considered an employee for super purposes, so they're primarily paid for their labour, the Payday Super rules will apply. Now, super contributions will need to be paid within seven business days of the Payday, and that's the date you pay them, so not the invoice date. so good idea there would be to check and review any contractor agreements you have, whether that's your existing staff or anyone you're onboarding, and seek any legal advice where needed. Now, the second thing to consider, in the worst case of scenarios through Payday Super, you could have a scenario where up to 15 months of contributions could fall into that next financial year due to the transition time frames. So the annual concessional contribution caps have not changed, but with this timing shift, that means there's a real risk of employees exceeding their caps, especially if you've got some high-income earners or those that have got salary sacrifice arrangements which can trigger that extra tax. So it's really important to understand what financial year your payments will be falling into and communicate it clearly to staff as the will send notes directly to employees if the caps are breached. Now another key change is there's no more quarterly averaging or washing up of errors during a quarter, so as each pay cycle will need to be accurate and complete.

So if you do overpay super in a pay cycle, you can request a refund from the super fund, subject to their policies, or can adjust future contributions if it's compliant to do so.

So to stay compliant, review some of those payroll processes now and make sure you're ready to pay super for contractors on invoice where required, keep a close eye on those contribution timings to avoid breaching caps, and maybe consider pro- providing any proactive guidance or FAQs for employees so everyone understands the changes and how that could affect them.

Now finally, just a quick update on three superannuation changes as which are also effective from the 1st of July, 2026. So firstly, the maxim contribution base on super contributions is going to change from a quarterly cap to an annual cap. So once an employee's earnings reach the annual cap of $250,000 in a year, no further super contributions will be required for the rest of the financial year. So this change is going to simplify tracking for high-income earners and also for the payroll teams, as the cap will only need to be monitored annually. But you should ensure that your payroll systems are able to implement this new calculation method, and again, inform those high-income employees about this change as well. Secondly, allocation time frames. So currently, super funds have 20 business days to allocate or return contributions. However, from the 1st of July, 2026, that will drop down to three business days. So good news there, your employees will get faster visibility of super being paid on their end, so they'll see it in their account quicker, and you'll see a quicker turnaround if there's any bounce-backs due to any reconciliation issues or errors.

Lastly, stapled funds. So currently, you must employ- provide employees with a choice of super fund, and if no choice is received back, request the stapled funds directly from the ATO. However, from the 1st of July, 2026, you can actually request the stapled fund and offer it at the same time you provide the choice fund to your- form to your employees. So we're hoping this will streamline onboarding and also reduce delays in setting up contributions. importantly, you'll still need to offer the choice of fund and follow the ATO processes if an employee doesn't submit their choice. So that's some of the changes we're going to see with onboarding, and Payday Super.

Another related shift we're watching closely is the proposed ban on advertising Super during onboarding, and what that's going to mean for employers and platforms. So to unpack that, I'm going to head back over to Luke. Thanks, Luke.

Thanks, Katie. And on the 26th of November 2025, so last week, Parliament introduced the Treasury Laws Amendment Supporting Choice, Superannuation and Other Measures Bill 2025. That's a mouthful. The bill, is essentially part two of the Payday Super reforms, and it in- introduces a new framework for, one, like Katie mentioned, the ban on advertising superannuation products during onboarding, but, two, the facilitation of a stapled fund look-up by an employer or its agent before, during, or after the time the employee is required to be given a standard choice form.

So there are some exceptions to the advertising ban. there's three. So, first, an employee stapled fund, second, the employer's default fund, and, third, the advert that is presented can only refer to a MySuper product that has met the most recent APRA performance test. So it's also worth noting that should this pass, and we believe it should, you know, at the latest early next year, a sta- that stapled fund look-up proposal will become law the day after the bill receives Royal Assent. So if it receives Royal Assent on the 1st of February, it's law on the 2nd. The advertising ban will take effect from 1 July 2026, and that will align with Payday Super.

Why do we think these laws are important? Well, Treasury's own modelling shows that allowing super funds to advertise on onboarding software risks about adding about 325,000 more people with multiple Super accounts a year, and that's not an outcome that we want. Now, while this is a little out of my scope, I would be saying if I'm a business using onboarding software today, it would be good to start getting familiar with things like whether that platform you use does advertise super funds during onboarding. And should the legislation pass, which again, we think it will, how that system will accommodate presenting an employee stapled fund, as these changes will be immediate. And lastly, how the platform will ensure it only advertises funds that have met the APRA performance MySuper test from 1 July 2026. So, preparation. we're on the home stretch.

There are 211 days until Payday Super commences, and we recommend you use them wisely. Now is really the time to start looking at who are your stakeholders, who are your suppliers, what are the dependencies, what are those key milestones? How will you communicate and when will you communicate with employees? What's your approach going to be for that hyper-care period? Payday Super hits, new regime's in place, what are your resources that you wrap around it and your processes? And really be clear on how you're going to manage that cut-over between today's laws and Payday Super's laws on 1 July 2026.

The big point here is remember there's nothing stopping you from moving towards a Payday Super contribution rhythm now. Better to learn now when it's draft and it's not in place than when it's in place and there are penalties that apply.

So, how to prepare? Look, there's a few areas that we have grouped together. One, internal engagement, two, employees and, and comms, three, data quality, and four, your systems. And I'm going to touch on each of them briefly. So internal engagement, well, that's really going to depend on the size of your business. So this could include for, for medium to larger businesses, HR, payroll, IT and tech, finance and treasury teams. For finance, how they make those payments, so what systems that they use, what will be the impact on cashflow, how you'll handle those ad hoc payments, i.e. bonuses and commissions. For technology and IT, if you're going to be using new systems or working towards real-time payments, what does testing and deployment look like? Are there any process changes required? Do you need to adjust your bank accounts? For resources, you know, you want to ensure you're reviewing your onboarding practices.

So review your onboarding materials or your benefits materials that talk about current superannuation payment cycles. How do you capture and record choice of fund for new starters? What are your pro- processes when an employee wants to change their superannuation fund, and how does that impact payroll cutoffs? How you w- how will you present choice of fund, your default fund, and the stapled fund in that new environment? And if you're still using manual processes, I'd re- really be considering what digital options are out there. From an employee perspective, you know, take the opportunity to let them know that Payday Super's coming. Let them know they'll likely notice Super contributions appear in their account more frequently. Or if they're changing funds or there's an irregular payment, it could be up to 20 business days before it's received by a fund.

You may also want to have some separate comms for high income earners, if that's relevant to you, about the move from quarterly contribution cap to an index annual threshold, and that period between FY26 and FY27 where you could see up to 15 months of contributions land in FY27. It's good to give people advance notice of that, given the impact on contribution caps.

At the heart of this is data quality, so you've got an opportunity now to really try and clean up your data. So ensure your employee personal information like name, date of birth, address, tax file number is correct. Check that an employee's super fund name, the super fund USI, or unique super identifier, and the member numbers are correct, especially where super funds may have closed or, or merged. And really ensure that the systems you have for capturing that new starter information and changes to existing employee records accurately store that information and, and know what your single source of truth is. Is that your HRIS system or is it your payroll system, and how do those two systems talk to each other? And last but certainly not least, your clearing house and payroll providers, you know, that, that software that you use, ensure that that software is set up for more frequent payments and start paying in line with pay day now. Now, while some of your providers, whether they're payroll or clearing houses, are still working through their readiness, it's important to start talking to 'em and understanding what new functionality they might have.

For example, what deployment times are they going to have? How are you going to be able to test it? What training they're going to be running, what changes you might need to make, and importantly, whether there's going to be any costs you need to factor in. You've also got the opportunity now to start reviewing error messages that you're getting from funds.

So there are error messages that you might get now, but your payment still goes through, whereas from 1 July, those payments could actually be rejected.

So now is the perfect time to start putting the right habits in place and upskill. Now, you're probably wondering how will AustralianSuper help you? Well, I'll, I'll tell you. AustralianSuper has mobilised a, a significant team and we're working really closely with our partners to ensure our systems are up to date.

We'll continue to communicate with businesses through sessions like this and directly to keep people well-informed. And in the new year, we should have a really good idea of what some of the tangible errors are likely to be in the system, what their root cause is, and how to fix them, 'cause some of the existing errors will be cleaned up through investment in systems, through investment in technology and automation.

But for those that are left, we want to give you good visibility of them and let you know what you need to do. As I mentioned, we're investing heavily in our employer portal, an improved one-stop shop for employers that'll have a clearing house functionality to remit contributions for all employees. It'll have a new employee onboarding solution to help manage superannuation choice of fund capture and the stapling process. It will accommodate a range of payment options and enhance reporting. And we'll provide that at no extra cost for registered employers to help them meet their Payday Super compliance responsibilities. The platform is intended to open its doors in February, March. We also have, as you can see on the screen, a Payday Super website. On that website you can access the checklist that you see on the right-hand side, that provides you with a whole range of practical steps. And we do have a national partnership and services team to guide you through all of this. And there will be a QR code at the end of the session that you can scan and request a call back from the team. That'll also be included, oh, I see in the chat, thanks Jacqueline, and in the follow-up email from the AI group.

So I know that's a lot of content, but I thought I would end with the words of the Deputy Commissioner, Emma Rosenzweig. She's from the ATO and really leading this. We attended a session with her and they said their goal is really to ensure employers stay on track and they're not trying to build a gotcha compliance regime, so there's a lot of support there. Make sure you avail yourselves of it, but I'll hand over to Innes now, just to wrap things up.

Thanks, Luke, and thanks, Katie, for that fantastic presentation. As you said, Luke, at the end, that is an enormous amount of information that's been provided and an enormous amount of information for people to absorb. Before we go to some questions, which Scott will run through, and thank you everyone for the questions, yes, the slides will be provided, so you'll get a copy of those. but just some messages just to reinforce. Align the time you pay super with the time you pay wages. That's step one.

So make sure you do that, so that you minimize the risk of, late allocation. be ready to implement from July the 1st. I have a question about that, which I'm going to ask myself in a minute. ensure, this is really important 'cause a lot of businesses use payroll services, so make sure that your payroll provider has their systems upgraded to be ready for 1 July.

Ask clearing houses to process contributions as quickly as they can and to provide real-time status updates of errors or successes, and confirm that super funds are ready to receive payments, and are able to, disburse unlocatable payments within three business days. So there's a lot of contact that needs to occur between now and 1 July to be ready, for what is a major change. -We will go to questions in a minute, right away. But if you ha- do have questions for AustralianSuper directly, please take this QR code, take a photo of this QR code, and that will direct you straight to AustralianSuper to allow you to get any information that you need to provide. okay. when you do call, when you do, you know, QR code, please ask for a callback, and you'll get one from AustralianSuper very quickly, to ensure that you are helped. One quick question from me before

I go to Scott Barclay, who's been moderating the lot of questions that have come in is, what happens, Wednesday, the 1st of July is a Wednesday. what happens to your payroll, payroll cycle if it is going over the middle of that week? Which side of the ledger do you fall on from the first of- for the 1st of July? So, if you're doing a fortnightly cycle and the, the Wednesday, the 1st of July is in the middle, where do you fit and what happens? Just for clarification.

Thanks, Innes. And you're touching on one of the, the most important parts here. This is the convergence of two regimes. And that's why we're saying, you know, start planning now and know what your payroll cycle is, and, and put in place the measures that you need to immediately. So, you know, Katie, I'll throw to you in a second to, to cover that. You know, in my mind, from 1 July onwards, moving forward, you need to be following, if a pay is made, after that, you need to fall in line with a QE day. And if you have a new QE day event post-1 July 2026, the new obligations apply.

So, in that example, of it falling in the middle, and let's say you're a week into the new financial year and you have your first QE day, the new Payday Super obligations apply, which mean that you would need to have the superannuation associated with that QE day received by your employee's superannuation fund in an allocable format. i.e., meaning that the data is right, and it can be allocated within seven business days. But Katie, I don't know if you want to add to that? Yeah. I think, there's been a lot of confusion around kind of the starting, if you are going to plan to start on that 1st of July. It's, in regards as Luke mentioned, it's about the Paydays or the QE days that fall after the 1st of July. So, even if you're paying, you know, partly in arrears and partly in advance, it's about that Payday. So, don't worry about the payment period or what it reflects, it's about that Payday that you've made. So, if you're making a pay on the 30th of June, then that's not going to fall under Payday Super. But if you're going to make anything, any Paydays after the 1st of July, then that's where you'll have to, follow the Payday Super legislation. So, I know there's a bit of a confusion about that, but our other recommendation is start sooner rather than later so that that question kind of, you know, you don't even get to that sticky territory, that you're ready to go before that 1st of July. Thanks, Katie.

Thanks, Luke. I'm going to hand over to Scott Barclay, our principal advisor on national workplace relations policy. And Scott's been front and centre for us at the Australian Industry Group as we work through these changes with the government. So, Scott, questions? Thank you. Thank you very much, Innes.

And thanks to, to Luke and Katie. We've had, numerous questions from members. If we don't get to them all, and we won't get to them all, we have them to inform our materials going forward. And we've got, a record of who asked them in a number of cases.

Also, Innes, just before we get to the questions, our AustralianSuper colleagues answered 22 of these questions as they've come in, which is extraordinary. So, we hope members have been really assisted in real time. Luke and Katie, can I take you to just a couple of issues? And they've come through really strongly in the questions that we got prior to today, and today.

The first is in regard to what you might term out-of-cycle payments. So, the clearest example is where somebody's employment is terminated between pay cycles. So, a, a single pay is effectively calculated and made for an employee out of cycle. Can you perhaps just run through briefly how the members need to treat that scenario, under the new arrangements? Thanks, Scott. And yeah, that's a nice chunky one. And in the essence of that, I'll hand it over to Katie to answer.

Thanks, Luke. And I think it's a really good question, and we're, one of them we're actually hearing quite a bit as well. So, under Payday Super, the rules are quite clear. Anytime you make that, you pay a qualifying earning, or QE, which include ordinary time earnings, so salary sacrifice and any other amounts that are subject to SG, the day of payment becomes a qualifying earnings day. So, even... This will apply even if a payment is ad hoc. So, for example, that termination payment, it's made outside of a usual pay cycle, so it could be that case where someone resigned suddenly or perhaps is dismissed, and you need to pay them on the day they leave, that payment will actually create its own QE day. So, that means that you need to make that super contribution for that payment to be received within seven business days. So, you can't defer it until your next regular payroll cycle. That obligation applies immediately. So, some important things to think about with this.

So, if that employee does nominate a new fund at termination, once again, that's that change where you can go up to 20 business days to have that first contribution received. The other thing is making sure and checking with your payroll system, system if they can handle any ad hoc or out-of-cycle payments and also trigger that super calculation as well automatically when that happens. And just one more thing I will mention about that as well, from a practical perspective, is making sure that the employee's fund details, before processing, you check those to limit any issues or rejections. And the other thing to be understanding that your clearing house or payroll provider might have their own timeframe, so you need to make sure you calculate that when looking through to ensure that those payments will go through to the super fund within that seven business days. Thank you very much.

And I, I won't put this as a question, but I just observed that there have been a number of questions coming through about particular difficulties for new starters, areas in the information they provide. And Cady's made the observation there about the 20 days- ... the different period that's provided for onboarding a new starter. So, that's something I'd encourage everybody to familiarise themselves with. Another bundle of questions which have come through in advance of today and today about monthly contributions.

So, a number of the members are saying to us, "I already was paying monthly, not quarterly." And we've had a, a variation on people asking about combinations of weekly pay runs, fortnightly pay runs, and monthly pay runs, and how that is to be navigated in regard to the new Payday Super obligations. Perhaps just, you might make a response to that for members, particularly where they're presently paying monthly or broadly people are seeking to look for opportunities of convenience and aggregation in when they can make these contributions, and the extent to which they can or can't do that. Yeah, for sure, I might take that one, Scott. And, you know, first and foremost, if you're paying monthly now, that's great, 'cause quarterly, is the, the rule, so it's, it's nice that you've been doing that. But it is a question that many employers that pay monthly wanna know, and what that means under Payday Super. You know, the key difference, I guess, in my mind, is that contributions now need to be made for each Payday or each qualifying earnings day, and not batched monthly. So, before we dive into those examples that you were giving there, Scott, whether it's weekly, fortnightly or monthly payrolls, I'd like to make an important point or s- a point that I think's important anyway, is that Payday is tied to the pay date, not the pay period that's worked.

So, if you pay wages on the 15th for work done in that previous fortnight, the super contribution is due based on that date of the 15th, not the start or the end of that work period. So, you talked about weekly. So, if an employer is currently paying wages weekly but makes super contributions monthly for all employees, under Payday Super, each weekly Payday creates its own obligation. So, you'll need to calculate and pay super each weekly pay run. So, that could mean four or five pay cycles that are paid from a superannuation perspective instead of one that is being paid monthly at the moment. And again, the important part, the fund or funds need to receive those contributions within seven business days. Same theory with fortnightly. So, if you're currently paying wages every two weeks but super monthly, under Payday Super, every fortnightly Payday is a qualifying earnings day. And again, you would need to make that superannuation contribution and have it land each fortnight with the superannuation fund within seven business days.

Now, monthly is a, an interesting one. So, if you're paying wages monthly, just like my wife gets paid monthly and you feel like you're, you're rich for a little bit, and your super contribution is paid monthly as well, you can continue making monthly contributions. But the timing, in which the, these are received by the super fund is critical in this instance. So, the super contribution must be received, again, within seven business days after that Payday. So, the main change for employers currently paying monthly is ensuring that contributions are made promptly after each Payday, rather than delaying. But, Scott, just to, to finish off, I think it's important for people to remember, even if you pay super and wages monthly now, there's still things like new data requirements from a superstream perspective. You need to make sure that you're uplifting your existing data so there's not errors in the, in the new world. Make sure you got the right onboarding practices in place for choice of fund and presenting the default fund and presenting the stapled fund, as well as that new single touch payroll requirement. So, I don't want people... There's less change if you're paying monthly, but there's still things that you need to do. Thank you very much.

Innes, I think we won't have time for any more questions. But I just wanna reassure everybody, we have got the questions and we've got some good material to work through with AustralianSuper for our further support to members, and for, as the further session we've foreshadowed for the new year.

Thanks, Scott. Time has gone and passed quickly cause there's so much information to absorb. again, I would urge you, out there, if you want more information or you have a very specific question about your business or your needs, please contact AustralianSuper. You don't need to be an AustralianSuper, you know, using AustralianSuper and they'll try to help you out. Please use this QR code, to make contact with them. A couple of points I'd just make in, quickly in finalisation. Use that QR code. The ATO, the Australian Tax Office, also has some useful resources online that is worth looking at and they're very important in this equation, so please look at that from the ATO. we will do another session, like this in, probably around April or so, just before the introduction of Payday Super to clarify any last minute concerns or issues that members may have. We've only got seven months to go until this change is implemented, so it's a significant change and a lot of work to be done in that time. if you have any questions, specifically to us at Australian Industry Group, please reach out. I should just assure you again, we've been in very heavy consultation with the government around this. We've had members involved in the consultation with Treasury now for a long time, so government is well aware of the .550 impact that this will have, on business making this change.

I wanna thank, Luke Fraser, Katie Pittman and all the team from AustralianSuper who've helped put together today's webinar. And a reminder that, yes, copies of the slides will be available to all who have registered for today's webinar.

Please, again, use this, this QR code, to get in touch with AustralianSuper, and the earlier QR code to, please fill out that end of year, expectation survey for what businesses are thinking about and planning for 2026, Payday Super included. So everyone, thank you for joining us today.

Thank you again to Luke and Katie, and if you have any questions, please do not hesitate to reach out. Thanks for joining us and have a great rest of the week. And if I don't talk to you again before then, have a great break over the new year. Thank you.