Starting on the 1st of July 2026, all employers will need to pay their employees’ superannuation at the same time as they pay wages — a system known as Payday Super (PDS). This major change is designed to ensure employees’ super is paid more frequently and transparently, while reducing the risk of unpaid or delayed contributions.
What you have to do under the new rules
Under Payday Super, you must ensure that the super guarantee (SG) amounts for each employee are paid and received by their super fund within seven days of paying the wages. This replaces the current quarterly due dates for super contributions.
The payment must clear in the employee’s fund within 7 days
The key compliance requirement under Payday Super is timing of clearance — not just payment initiation. The super contribution must appear in the employee’s fund within seven business days of the wage payment.
This will make it important to:
· Ensure the super payments are processed on the same day as the wage payments,
· Allow for bank processing times and clearing delays, especially for industry fund,
· Use payroll and super payment software that ensures the seven-day deadline is met, and
· Double-check that payments are sent promptly just after each pay run.
Pay early if you prefer
Paying super earlier than the wage payment date is allowable. The proviso that the employee’s super fund receives the super within 7 days of the wage payment date still applies.
The earliest you can make a super payment in advance of paying wages is 12 months. Whilst you obviously wouldn’t pay super 12 months prior for employees who may leave, you may want to pay your own super early to ensure there are no hiccups meeting the new timing deadline.
What to do if you’re late paying the super
If you miss the 7 day payment clearance deadline, you should still pay the super as soon as possible.
The ATO has not released any information as at today (12th April 2026) on it’s website about the voluntary disclosure regime similar to the Superannuation Guarantee Charge (SGC) forms that employers are required to complete when super is late under the current rules. Commentary from experts associated with the new Payday Super rules (see ‘What’s changing, point 8) suggests that the existing SGC forms will be phased out and replaced with an online disclosure.
What the penalties are for being late
If you pay super late, the ATO can issue an assessment which will result in
1. Extra amounts payable as a ‘notional earnings component’, currently calculated at 10.61% pa of the late amount,
2. An administrative charge of up to 60% of the late super. This amount can be reduced to nil depending on circumstances such as the employer’s payment history,
3. An ATO ‘General Interest Charge’ on the late amount, and
4. A late payment penalty of 25% of the late super amount, if any late super is not paid within 28 days of the ATO notice. The penalty can increase to 50% if the employer has had a previous penalty in the last two years. Years
The ATO will use single touch payroll software to discover whether super has been paid late.
What the risks for employers are
The seven-day deadline introduces new risks that employers need to be aware, for factors that may be outside their control.
Risk 1 – Payroll software payment times and payment clearing delays outside employer’s control
Many of the current payroll software providers such as Xero and Quickbooks offer superannuation payment services as part of their software. Once a super payment is made through this software, the payments are then routed through banks and payment gateways. The whole process can take up to seven to nine days for the super payments to clear in the employee’s super fund accounts.
This means that employers can pay super through their payroll software on the same day as paying the wages but still risk falling foul of the new rules and opening themselves to interest, penalties and costly administrative work.
Despite this well-known fact and despite having full warning and knowledge of this, the current Federal Government has still made employer’s liable and fully responsible for super payments clearing into employee’s super funds within seven days of wage payments, rather than base the Payday Super rules around payment dates and allow for discrepancies and variances in electronic payment times.
None of the major software providers has guaranteed their super payment processing times will meet the required seven day standard and their processing times may also be subject to matters outside their control, such as the third-party payment platforms their software is linked to. Whilst there is discussion about the Federal Government’s ‘new payments platform’ that may quicken processing times, not all the major software providers are stating that they will have this service in place on 1st July 2026.
Risk 2 - New employees and incorrect employee super details
If an employee’s super fund or member number that the employee provides is incorrect, payments can bounce or fail to clear. By the time the funds are returned to the employer’s bank account and are repaid to the correct account, the employer will miss the seven day deadline and be liable for any ensuing ATO interest and penalties.
Employers are allowed 20 days rather than seven for the first super payment to a new employee to clear in the employee’s fund.
For new staff, you must obtain their chosen super fund or use the ATO’s stapled super fund process promptly. Delays in onboarding new employee details could result in missed deadlines for their first super payment.
Employers may want to consider obtaining an indemnity with any employment contract about superannuation details, to offset any financial liability resulting from incorrect details.
Risk 3 – Contractors whom you have to pay super to
Some contractors are entitled to super even if they invoice you as individuals. Under Payday Super, these contributions must be paid just as if they were employees. The rules on whether you have to pay super to contractors are complex and setting up contractors to pay them super through payroll software may not be as straightforward as paying employees. Ensure you review all contractor arrangements to ensure compliance well before July 2026 and have plans in place to manage super payments for new contractors.
Risk 4 – Issues with self-managed super funds (SMSFs)
Payments to SMSFs must pass through SuperStream and be properly receipted by the fund’s nominated electronic service address (ESA). If an SMSF’s details are incorrect or its bank account changes, payments can fail to clear within 7 days. Always confirm the active ESA and bank details for SMSF members. If the SMSF changes its bank account or becomes ‘non-compliant’ by being late to lodge a tax return, the employer is still liable if super payments are received late. This is another area where employers may consider having an indemnity from their employees if the employee’s SMSF causes super processing issues outside the employer’s control leading to ATO interest and penalties.
Risk 5 – End of year wage payments for directors
Many directors declare wages for a financial year and calculate this after the end of the financial year, once profit is known and an appropriate and agreed amount is calculated. Under the previous rules, this left time to pay super until 28th July. Under the Payday Super rules, this timing won’t work. Directors’ will have to work out how much to declare as wages and pay super pay before 30th June and pay the super to clear in their fund within 7 days of declaring the wage.
Getting prepared
Employers are advised to start putting through super payments with each payrun as soon as possible and before the 1st July official starting date, to
1. Help start to manage any cashflow changes that may arise with the change to mandated Payday Super,
2. Identify any internal processing issues that can be rectified before 1st July 2026, and
3. Ensure their super payment software meets the seven day processing requirements and if not, provide time to change providers.
Directors are also advised to
1. review profit at the start of June and make plans for wage and super payments to be declared for the year, if they haven’t already declared wages.
2. Consider indemnities from staff for incorrect super fund details or lack of employee’s SMSF compliance that leads to ATO issues with the employer, and
3. Review whether super payments to any contractors are required and if so, plan for super processing that will meet Payday Super requirements.
Whilst paying super with each payrun clears out the liability and ensures you don’t have to come up with a large sum each quarter, the inflexibility of the Payday Super rules and the payment processing timing issues creates ATO risks outside the employer’s control. The best plan is to be as organised and prepared as possible to both mitigate these risks and spend as little time as possible fixing any problems that may arise once the rules come into force.
And don’t forget to pay your March quarter super on time
If you haven’t already, don’t forget that the March 2026 quarter super due date is 28th April. Super must clear in the employee’s funds accounts by the 28th, so you may need to allow at least a week for processing time if you’re using payroll software such as Xero.
Copyright Angus Morrison
ABN 78 624 606 295
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