Payday super and what it means for employers

Employer news
13 November 2023

Payday super has been proposed. Here’s what it means for employers. 

In the latest Federal Budget delivered in May 2023, the government announced the introduction of payday super, which is proposed to come into effect on 1 July 2026.

In this article, we explore:

  • What is payday super? 
  • How will it affect employers? 
  • Why is the Federal Government proposing payday super? 
  • Where you can find help. 

Please note at the time of publishing, payday super is proposed and not yet law. 

What is payday super?    

Payday super is the requirement to pay your employees’ Super Guarantee (SG) entitlements on the same day you pay their salary and wages, rather than quarterly. This change is proposed to come into effect on 1 July 2026. 

We’ll keep you informed of any announcements about payday super as they are made available. 

How will payday super affect employers?  

The introduction of payday super will be a significant change for many employers. Fortunately, there’s time to prepare. 

If you’re already paying your employees’ SG contributions with your existing pay cycle, no change is required. If you’re not currently doing this, you’ll need to adjust your processes by no later than 1 July 2026.

Making the switch to paying super on payday may help to:

  • Reduce the risk of missing super payments and incurring the SG charge due to unpaid super (see more on this below) 
  • Reduce your payroll liabilities and streamline your payroll system 
  • Position your business as an employer of choice.  

You may also consider making the change to payday super ahead of time to ensure your systems are ready to go on 1 July 2026, should this change become law.   

Why is the Federal Government proposing payday super? 

The government has proposed payday super to strengthen Australia’s superannuation system and provide a more dignified retirement for millions of workers.  
For example, a government report showed that a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6,000 or 1.5% better off at retirement if their super was paid on payday.

Payday super will also make it harder for employers to avoid paying SG to eligible employees. While most employers do the right thing and pay their employees’ SG as required, some employers don’t. For the financial year 2019/20, the Australian Taxation Office (ATO) estimated $3.4 billion worth of super went unpaid.

What happens if you don’t pay super on payday from 1 July 2026? 

Currently, employers must pay super for eligible employees at least four times a year, on or before the quarterly SG payment due dates.  

If an employer fails to meet their SG obligations, they must pay a penalty called the SG charge to the ATO. The SG charge is more than the super they would have otherwise paid to the employee's fund and is not tax deductible. 

If an employer doesn’t comply with payday super from 1 July 2026, they will face the SG charge. You can find out more about the SG charge on the ATO website.  

We’re here to support you

We understand that super changes can be confusing, which is why we’re here to help. We’ll keep you informed if this measure becomes law and of your obligations as an employer. 

If you have questions, you can contact your dedicated CareSuper representative. If you’re not yet a CareSuper employer, you can complete this form and we’ll be in touch.