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What is Payday Superannuation?

Wage & Pay

27 Feb 2026 (Last updated 27 Feb 2026)

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An early form of superannuation developed for some public servants and large corporations like banks, can be traced back as far as the mid-1800s.

In 1992 the federal government introduced compulsory super, also known as the superannuation guarantee (SG). A law where it was law for employers to pay 3-4% of employee wages into a super fund.

This initiative meant almost every employee would have some savings set aside for retirement after work.

When does Payday Super start?

Perhaps the biggest change since the introduction of the superannuation guarantee, is Payday Super.

Commencing 1 July 2026, Payday Super requires your business to pay each employee’s superannuation contribution at the same time you pay their wage or salary. Whether weekly, fortnightly, or monthly.

If a contractor is considered an employee for superannuation guarantee purposes, you must follow the same Payday Super rules and timing for their super contribution payment as any other employee.

An employee’s superannuation contribution must be in their nominated fund within seven business days of their payday. If you have hired and are in the process of onboarding new staff members, you have 20 business days to make their first super payment.

What you need to do

With the introduction of Payday Super, the previous quarterly buffer for superannuation contributions no longer applies. With more frequent superannuation payments, you’ll need to more closely monitor how you manage your cash flow.

For small and medium-sized businesses, you should review and update your payroll system to ensure it’s ready to pay employee and if required contractor super contributions more frequently. Some payroll software may already include functions that allow you to make super guarantee payments with your pay cycle and real-time lodgement.

If not, you should upgrade to a system capable of automating calculations, scheduling, and lodgement of funds. This can significantly reduce manual admin and errors.

Small Business Superannuation Clearing House

A clearing house is where you send an electronic payment complete with your employees' super contribution data. The clearing house then pays super into your employees' nominated super fund for you.

The current Small Business Superannuation Clearing House (SBSCH) will officially close operations on 30 June 2026. You will need to ensure you have a compliant alternative to make super contribution payments on time through SuperStream and switch to that new system as soon as practicable. The sooner you move to a new system the sooner you can identify and correct any errors.

To ensure your employee superannuation contribution payments are accurate and received on time, you might need to alter your payroll processes.

Communicate with employees

To ensure a smooth transition and alleviate and concerns about superannuation payments, it’s advised you communicate with your employees. Inform them about the change, timelines, and what it means for their pay and super contributions.

Payday Super can be integrated into payroll workflows, calculating and lodging super contributions automatically on every pay cycle. This reduces manual steps and helps ensure timely contributions.

What happens if payments are late?

If you miss a super payment, don’t pay the full amount, or don’t meet the seven-business day deadline, the Australian Tax Office (ATO) may find you liable for the Superannuation Guarantee Charge (SGC). This charge is to compensate employees for a delay in receiving their super payment.

Depending on any prior penalties, the SGC could include the unpaid super guarantee, daily interest, and administrative penalties (up to 60%). These penalties could significantly impact your bottom line.

Our expert team at Peninsula can offer advice 24/7 on wages and modern industry awards. Call now.

This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

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