Payday Super from 1 July 2026: Contributions Within 7 Days of Payday

From quarterly to payday

The current system allows employers to pay superannuation guarantee (SG) contributions quarterly, within 28 days of the end of each quarter. This will change. From 1 July 2026, employers will be required to pay SG contributions for each employee within 7 business days of each payday.

This shift from quarterly payments to payday superannuation is driven by the Treasury Laws Amendment (Payday Superannuation) Act 2025. The reform was initially announced in the 2023-24 Federal Budget and has been confirmed in subsequent Budgets. OTE vs QE payday super explained provides further detail on the terminology.

The government’s policy intent behind this change is to reduce unpaid superannuation, which is currently estimated at $5 billion per year, accelerate compound returns for superannuation members, and align SG payments with other withholdings taken from employee pay.

The 7 business day rule

Superannuation Guarantee (SG) contributions must be received by the employee’s superannuation fund within 7 business days of payday. For the purposes of this requirement, ‘payday’ is defined as any day on which the employer pays Ordinary Time Earnings (OTE) to the employee.

The 7-day timeframe begins on the day after payday, and only business days are counted. This means that weekends and public holidays are excluded from the calculation. Employers utilising clearing houses, including the ATO Small Business Superannuation Clearing House until its closure on 1 July 2026, are responsible for ensuring contributions are received by the fund within this 7-day window.

Failure to meet this timeframe will result in late or unpaid contributions triggering the Superannuation Guarantee Charge under the Superannuation Guarantee (Administration) Act 1992.

SG Charge framework updated

The Superannuation Guarantee (SG) Charge regime is being amended to align with the new payday super contribution due dates from 1 July 2026. These changes reflect the shift to more frequent superannuation contributions by employers.

The SG Charge will maintain its existing structure, encompassing the shortfall amount, a nominal interest component, and an administration component. However, the calculation methodology is being revised to include increased interest rates and stricter penalties for employers who repeatedly fail to meet their obligations.

Employers experiencing genuine hardship or exceptional circumstances may still apply to the Australian Taxation Office (ATO) for remission of the interest and administration components of the SG Charge. The ATO continues to administer the SG Charge under the Taxation Administration Act 1953.

Practical employer impacts

Employers will need to make changes to payroll systems and processes to accommodate the new 7 business day superannuation payment cycle. This includes ensuring systems can accurately calculate and remit superannuation contributions within this timeframe. Reporting through SuperStream-compliant channels will also require updates to ensure mandatory data fields align with the payday cycle.

The Small Business Superannuation Clearing House (SBSCH) will cease operation on 1 July 2026. Employers currently utilising the SBSCH must transition to either a commercial SuperStream-compliant clearing house or direct super fund payment arrangements prior to this date.

The legislated superannuation guarantee (SG) rate of 12% will remain unchanged. Employers must continue to remit this rate, alongside ongoing Single Touch Payroll (STP) reporting requirements.