Treasury Releases Further Information Regarding ‘Payday Super’

In the 2023/24 Budget, the Government announced a reform to align employers’ payment of superannuation guarantee (‘SG’) contributions with salary and wages from 1 July 2026.

Treasury has recently released a fact sheet providing further proposed implementation details about the Government’s ‘payday super’ measure.   The fact sheet confirms that, from 1 July 2026, an employer will generally be required to make SG contributions on ‘payday’. For these purposes, ‘payday’ is the date that an employer makes an ordinary times earnings (‘OTE’) payment to an employee.

Each time OTE is paid, there will (subject to some limited exceptions) be a new seven day ‘due date’ for contributions to arrive in the employees’ superannuation fund. This is meant to provide time for the movement of funds through the payment system. This means an employer will be liable for an SG charge unless SG contributions are received by their employees’ superannuation fund within seven calendar days of payday.

The approach to correcting late contributions will also be simplified under payday super. Employers will no longer need to make an election or choose which period for which each late contribution should count. Instead, contributions will automatically count towards the earliest possible payday that has not yet been assessed for SG charge, and which still has an outstanding SG shortfall.

Several other changes are also proposed to support the transition to payday super, including (among others):

– the deadline for superannuation funds to allocate or return contributions will be reduced to three business days (down from 20); and

– the ATO’s Small Business Superannuation Clearing House will be retired from 1 July 2026.

The onus will remain on employers to make sure they pay SG at the same time they pay their employees’ wages.

Employers who repeatedly fail to pay on time and fail to disclose promptly will be exposed to the maximum administrative uplift component of the SG charge.

Employers will also be required to report in Single Touch Payroll both the OTE and the total superannuation liability for an employee, ensuring the SG can be correctly identified.

It is intended that as a result of these changes, employees that previously had to wait up to four months to determine whether they had been paid SG will be able to check their superannuation account as their wages are paid to determine if their employer is meeting their obligations.