Employer
13 December, 2024

Get ready: ‘Payday super’ is changing the way you pay

Quarterly super payments will soon be a thing of the past, with the government confirming further implementation details about Payday super. Starting 1 July 2026, employers will be required to pay superannuation guarantee (SG) contributions in line with pay cycles.^
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What is Payday super?

Payday super means you’ll need to pay your employees’ super guarantee (SG) on the same day you pay their wages, rather than quarterly. This applies to all businesses, regardless of whether your pay cycle is weekly, fortnightly, or monthly. 

Why the change?

The government aims to ensure more workers receive their full super entitlements to help them achieve better retirement outcomes. While most employers comply with SG requirements, some do not. This reform directly addresses the ongoing issue of unpaid and underpaid super.

How Payday super will help your business

  • Improving payroll processes: Integrating super payments with payroll can create a more efficient and automated system.
  • Reduce payroll liabilities: Regular super payments lower the risk of accumulating large quarterly payments, streamlining cash flow management.
  • Avoiding penalties: Timely payments helps businesses avoid the non-deductible super guarantee charge (SGC).
  • Enhance your reputation: Embracing this change early can position your business as an employer of choice, demonstrating commitment to your employees’ financial wellbeing.

 

What’s in it for your employees?

  • Tackles delayed super: This reform ensures employees receive their SG contributions at the same time as their pay, tackling the issue of delayed or unpaid SG contributions.
  • Real-time growth: Employees will see their super grow alongside their wages, reducing lost super and improving investment outcomes.
  • Enhanced compounding returns: Frequent contributions will ensure employees benefit from compounding investment returns, leading to a more secure retirement.
  • Increased visibility: Employees will have better visibility over their super, making it easier to track their SG contribution payments.
  • Reduces unclaimed funds: More frequent payments will help reduce the amount of unclaimed super, boosting retirement savings.

 

Support to help you transition to Payday super

To support the transition to Payday super, several changes are being implemented by the government:

  • Super funds must allocate or return contributions within three business days, down from 20. 
  • SuperStream standards will be updated for faster payments and better error handling. 
  • The ATO's Small Business Superannuation Clearing House will be retired, with small businesses transitioning to alternative solutions. 
  • New rules will also streamline super fund choices for employees, reducing duplicate accounts. 
  • Additionally, advertising during onboarding will be restricted to MySuper products that pass performance tests, ensuring better outcomes for employees.
  • And of course, we're just a phone call away if you need any assistance. Reach us at 1800 005 166.

 

Avoiding penalties

If your employees' SG contributions are not paid at the same time as their pay day and aren't received by their super fund within 7 days of pay day, you'll be liable for the SGC, which is non-deductible and exceeds the owed super amount. 

We’re here to help

Navigating super changes can be complex, but we’re here to support you. We’ll keep you updated on any developments and your obligations as an employer.

Got a question? Call us on 1800 005 166 8am to 7pm (AEST) Monday to Friday or contact your Employer Relationship Manager.

 

Information correct as at 12 December 2024.

^  The Treasury Payday Super fact sheet September 2024.

CareSuper Pty Ltd (Trustee) (ABN 14 008 650 628, AFSL 238718). CareSuper (Fund) (ABN 74 559 365 913). 

Any advice is provided by CareSuper Advice Pty Ltd (ABN 78 102 167 877, AFSL 284443). Consider the PDS and TMD at caresuper.com.au/pds. A copy of the Financial services guide for CareSuper is available at caresuper.com.au/fsg.

This is general information only and doesn’t take into account your objectives, financial situation or needs. Before making a decision about CareSuper, you should consider if this information is right for you. You may also wish to consult a licensed financial adviser.

All information, rates and/or fees are current at the time of production and are subject to change. Changes to government legislation and superannuation rules made after this time may affect the accuracy of the information provided. You may wish to obtain professional advice before acting on any of the information contained in this document.