Speak To An Expert
Skip to content
search
    Close search
    | 2 minute read

    Australia: Payday Super and Qualifying Earnings Changes

    by activpayroll team

    Superannuation reporting in Australia is undergoing a significant change with the introduction of Payday Super from 1 July 2026. These changes build on the Single Touch Payroll (STP) framework and are designed to improve compliance, reduce underpayment risk, and modernise the way employer superannuation obligations are calculated and reported. 

    Aus Payday Super

    Background: Single Touch Payroll and Superannuation Reporting  

    Since the rollout of Single Touch Payroll (STP), superannuation reporting has been a key compliance focus for the Australian Taxation Office (ATO). Early analysis identified a significant gap in employer superannuation payments, estimated at around AUD 6 billion, which led to further refinement of reporting requirements and the evolution towards Payday Super. 

    Historically, superannuation has been calculated on Ordinary Time Earnings (OTE), which includes earnings linked to an employee’s standard working hours. Employers currently report both OTE and associated Superannuation Guarantee (SG) liabilities through STP to the ATO. 

    Key Changes Under Payday Super  

    From 1 July 2026, the existing framework will transition to a new model based on Qualifying Earnings (QE) and enhanced Super Liability reporting. 

    Key changes include: 

    • Replacement of Ordinary Time Earnings (OTE) with Qualifying Earnings (QE) as the basis for superannuation calculation
    • Alignment of superannuation obligations with pay cycle frequency rather than quarterly reporting periods
    • Mandatory reporting of both QE and total Super Liability through STP   

    Qualifying Earnings and Super Liability 

    Under the new framework: 

    • Qualifying Earnings (QE) are earnings on which the 12% Superannuation Guarantee (SG) is calculated, as defined by Australian Taxation Office (ATO) rules. These may not include all remuneration components covered under awards or employment contracts.
    • Super Liability represents the total superannuation an employer is required to pay, including:
      • SG calculated on QE
      • Additional superannuation obligations arising from awards, enterprise agreements, or employment contracts  

    Maximum Contribution Base Changes  

    A key structural change under Payday Super is the transition from a quarterly to an annual Maximum Contribution Base (MCB). 

    Under the current system, SG obligations are assessed quarterly. From 1 July 2026, the MCB will operate on an annual basis, meaning: 

    • Super contributions are assessed cumulatively across the full financial year
    • Timing of super payments will change across the year
    • Employers will need to carefully manage cashflow to accommodate annualised obligations

    Illustrative Impact of the Changes  

    The following detailed monthly comparison illustrates the impact of the transition from a quarterly Maximum Contribution Base (MCB) model to an annual MCB framework under Payday Super. 

    Standard Salary Example

        Existing Setup Changes 1st July 2026
      Monthly Salary Earnings Liable for Existing Quarterly MCB  SG YTD Total of Super Paid  Earnings Liable for Payday Super Annual MCB  SG YTD Total of Super Paid
    July 33000 33000 3960 3960 33000 3960 3960
    August 33000  29500 3540 7500 33000 3960 7920
    September 33000  0 0 7500 33000 3960 11880
    October 33000  33000 3960 11460 33000 3960 15840
    November 33000  29500 3540 15000 33000 3960 19800
    December 33000  0 0 15000 33000 3960 23760
    January 33000  33000 3960 18960 33000 3960 27720
    February 33000  29500 3540 22500 33000 3960 31680
    March 33000  0 0 22500 6830 819.6 32499.6
    April 33000  33000 3960 26460 0 0 32499.6
    May 33000  29500 3540 30000 0 0 32499.6
    June 33000  0 0 30000 0 0 32499.6
                   
    Total Super earnings and liability   250000 30000   270830 32499.6  

    Salary with Bonus Example

        Existing Setup  Changes 1st July 2026   
    July Monthly Salary Annual Bonus Earnings Liable for Existing Quarterly MCB  SG YTD Total of Super Paid  Earnings Liable for Payday Super Annual MCB  SG YTD Total of Super Paid
    July 15000   15000 1800 1800 15000 1800 1800
    August 15000 50000 65000 5700 7500 65000 7800 9600
    September 15000   15000 0 7500 15000 1800 11400
    October 15000    15000 1800 9300 15000 1800 13200
    November  15000   15000 1800 11100 15000 1800 15000
    December  15000   15000 1800 12900 15000 1800 16800
    January  15000   15000 1800 14700 15000 1800 18600
    February  15000   15000 1800 16500 15000 1800 20400
    March  15000   15000 1800 18300 15000 1800 22200
    April  15000   15000 1800 20100 15000 1800 24000
    May  15000   15000 1800 21900 15000 1800 25800
    June  15000   15000 1800 23700 15000 1800 27600
                     
    Total Super earnings and liability paid       230000  23700    230000   27600    

    These examples demonstrate how timing of payments and annual threshold aggregation may impact total superannuation contributions and employer cashflow planning. 

    Impact on Employers  

    The introduction of Payday Super will require employers to review payroll and compliance frameworks, including: 

    •  Mapping payroll elements to Qualifying Earnings (QE) definitions
    • Reviewing employment contracts, awards, and remuneration structures
    • Ensuring payroll systems support QE and Super Liability reporting under STP
    • Planning for changes in cashflow due to annual Maximum Contribution Base (MCB) application
    • Training payroll teams on updated reporting requirements   

    What Employers Should Do Now  

    With implementation approaching, employers should begin preparing by: 

    • Reviewing payroll configurations and earnings classifications
    • Testing system readiness for Payday Super reporting requirements
    • Assessing financial impact of annualised super obligations
    • Updating internal compliance and reporting processes

    Early preparation will help ensure a smooth transition and reduce compliance risk. 

    Australia - Global Insights  

    For further detailed guidance on payroll, employment law and compliance in Australia, visit our Australia Global Insights on the activpayroll website. 

    Next Steps  

    If you require support in preparing for upcoming changes to superannuation arrangements in Australia, please get in touch. Complete our Contact Us form and a member of our expert team will be happy to assist with your queries. 

    By scaling, streamlining, or ensuring your people are taken care of, we bring absolute clarity to your global business.

    Let’s Partner

    Latest news & insights

     
    May 11, 2026 | 2 minute read

    Activpayroll Celebrates Dual Shortlist Recognition at the 2026 Global Payroll Awards

    activpayroll shortlisted for Global Payroll Supplier of the Year and Transformation Project of the Year at...

    Read More
     
    May 8, 2026 | 2 minute read

    25 Years of activpayroll: A Partnership Perspective from Vistra Korea

    Vistra Korea shares its perspective on partnering with activpayroll, highlighting global payroll coordination...

    Read More
     
    May 5, 2026 | 3 minute read

    UK Employment Related Securities Reporting and HMRC Filing Obligations for Employee Share Schemes

    UK ERS reporting explained, including HMRC filing deadlines, nil return rules, scheme closure and key...

    Read More

    Talk to a specialist today and find out how we support the growth of over 500 businesses with a range of activpayroll solutions designed to help your global payroll and people operations succeed.

    Get In Touch