Superannuation is set to change, with Payday Super becoming mandatory from 1 July 2026. Employers will need to pay super at the same time as wages rather than quarterly. While the change is still over a year away, businesses should start preparing now to avoid disruptions.
Read more about Payday superannuation on the ATO website.
What is Payday Super?
Payday Super requires employers to pay super contributions when they process an employee’s wage or salary payment. The goal is to improve employee retirement savings by ensuring contributions reach funds more frequently and reducing the risk of unpaid super.
For businesses, this change means shifting from the current quarterly payment cycle to more frequent superannuation payments. The ATO will release further implementation details closer to 2026, but businesses that plan ahead can transition more smoothly.
Why Businesses Should Start Now
Although Payday Super doesn’t take effect until 1 July 2026, preparing early can help businesses avoid cash flow issues, ensure compliance, and streamline payroll processes.
1. Cash Flow Adjustments
If your business currently benefits from the flexibility of quarterly super payments, now is the time to reassess your cash flow management. More frequent payments mean funds leave your account more often, which could impact working capital. Transitioning gradually allows businesses to adjust without financial strain when the deadline arrives.
2. Supporting Employees
Superannuation forms part of an employee’s earnings, and more frequent contributions help their retirement savings grow faster. Employees will also gain greater visibility over their super, as contributions will appear in their accounts sooner.
3. Ensuring Compliance and Reducing Risk
The ATO is increasing its focus on unpaid super, making compliance even more important. Under the current system, missing a quarterly super payment leads to penalties and potential Superannuation Guarantee Charge (SGC) obligations. Transitioning now helps businesses avoid last-minute compliance issues.
What to Do Next
With Payday Super coming in 2026, businesses can take steps now to prepare:
- Review payroll processes – Assess your current super payment process and identify necessary changes.
- Assess cash flow impact – Work with your bookkeeper or accountant to determine how frequent super payments will affect your finances.
- Check with your payroll provider – Ensure your payroll system can process payday super. Most STP-enabled software will comply, but confirming in advance is advisable.
- Consider transitioning early – Moving to monthly or fortnightly super payments now can ease the adjustment period.
For more information on superannuation payment obligations, visit the ATO Superannuation Payment Obligations page.
If you’re unsure how Payday Super will impact your business, review your payroll and financial processes now. Planning ahead will ensure a smooth transition when the new rules take effect.
