Australia’s Payday Super Reforms: Transforming Employer Superannuation Obligations
by activpayroll
Australia’s government has introduced landmark legislation that will transform how employers manage superannuation payments. The Payday Superannuation Bill 2025 and Superannuation Guarantee Charge Amendment Bill 2025, announced by Treasurer Jim Chalmers, aim to ensure employers will be required to pay their employees’ superannuation guarantee (SG) at the same time as their salary and wages.
This change marks a significant shift in employer obligations, payroll processes, and compliance frameworks across Australia, setting a new benchmark for real-time superannuation payment and reporting.
Employers: New Requirements and Key Changes
Under the proposed Payday Super legislation, employers will be required to make Superannuation Guarantee (SG) contributions at the same time as salary and wage payments, commonly referred to as Qualifying Earnings Day (QE Day).
Key provisions under the draft legislation include:
- Super Due on Payday: Employers must ensure SG contributions are received in an employee’s super fund within 7 business days of payday, except in limited exceptional circumstances (e.g. natural disasters, fund mergers, or technical outages).
- Qualifying Earnings Definition: SG will be calculated based on Qualifying Earnings, a term aligned closely with Ordinary Time Earnings (OTE) and inclusive of salary-sacrificed super contributions.
- Annual Maximum Contributions Base: The maximum contributions base will transition from a quarterly to an annual calculation, using the formula: Concessional Contributions Cap × 100 / Charge Percentage (e.g. $27,500 × 100 / 12 = $229,167).
- Enhanced Reporting via STP: From 1 July 2026, employers will need to report both Qualifying Earnings (Q) and Super Liability (L) in Single Touch Payroll (STP) systems. Digital Service Providers (DSPs) will update STP products to support these new codes.
- Tax Deductibility: Superannuation Guarantee Charge (SGC) amounts — excluding general interest charges and penalties — will become tax-deductible.
Preparing for Change
Although Payday Super is not yet law, its passage is expected, and businesses are encouraged to prepare early. Employers should take proactive steps to ensure compliance and operational readiness ahead of the 1st of July 2026 implementation date.
Key actions for employers include:
- Update internal controls and workflows to maintain compliance with legislative requirements.
- Clarify contribution timing and salary sacrifice changes with employees.
- Verify payroll structures and earnings categories to ensure accurate super reporting.
- Prepare payroll and HR teams on qualifying earnings, reporting codes, and the annual contribution cap.
- Coordinate with software providers to confirm system upgrades and test new reporting functionality.
- Evaluate cash flow impacts from more frequent super payments and adjust schedules as needed.
Employee Perspective: Faster, Fairer Super Payments
For employees, Payday Super delivers clear benefits, super contributions will reach their accounts faster, enabling earlier compounding and improving retirement outcomes. The reform also reduces risks of unpaid or delayed super going unnoticed until compliance checks are completed.
The transition to Payday Super represents a major evolution in Australia’s payroll and superannuation landscape. With the government’s strong backing, employers should expect this initiative to become law and begin aligning systems, policies, and training programs accordingly.
Australia - Global Insights
Australia’s move towards real-time super contributions reflects a wider global shift towards digital-first payroll and tax compliance. For multinational employers, these developments reinforce the importance of harmonising payroll systems, improving data accuracy, and enhancing real-time reporting capabilities.
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 would like to understand how Payday Super may impact your business or payroll processes, please get in touch. Complete our Contact Us form, and a member of our expert team will be happy to assist with your queries.