Australia reshapes employer superannuation obligations through major Payday Super reform

Australia’s upcoming “Payday Super” reform will fundamentally change how employers manage superannuation contributions. Instead of quarterly contributions, employers will need to pay super guarantee contributions at the same time as wages. The reform also introduces a broader basis for calculating super guarantee contributions and updated employer reporting requirements. These changes will take effect from 1 July 2026.

Background

The reform was introduced under the government’s 2023–24 budget package to address issues of unpaid and underpaid superannuation and will take effect on 1 July 2026, with the Australian Taxation Office (ATO) responsible for administering and enforcing the updated framework. The changes are designed to increase contribution timeliness, improve retirement outcomes, and give both employees and regulators greater visibility over superannuation entitlements.

Superannuation is Australia’s mandatory, tax‑advantaged privately managed retirement savings system. Employers are required to pay super guarantee contributions to an employee's nominated superannuation fund at the mandated statutory rate. Employers must maintain a default superannuation fund for employees who do not have a "stapled" fund (i.e., a fund that follows them as they change jobs) and do not nominate a fund.

Key details

Change to super guarantee contribution payment cycle

Under the new requirements, employers must pay super guarantee contributions on each payday rather than accumulating them for quarterly payment. With this change, superannuation funds must receive contributions within seven business days of payday, except for limited circumstances such as the first contribution for a new employee. This represents a substantial shift from the existing system, which allows contributions to be received by funds within 28 days after the end of each quarter.

If employers do not pay contributions on time, they are liable to pay a super guarantee charge (SGC). Details on the components and assessment of SGC are available on the ATO’s website here (opens a new window).

Broader basis for calculating super guarantee contributions

The minimum super guarantee contribution rate as of 1 July 2025 is 12% of ordinary time earnings (OTE), which is the amount paid to employees for their ordinary hours of work (see the ATO’s website here (opens a new window) for a list of payments that are OTE). Employers do not have to make contributions on an employee’s earnings above a maximum contributions base (AUD 62,500 per quarter until 30 June 2025; AUD 250,000 per year from 1 July 2026). Some industrial awards or collective bargaining (i.e., enterprise) agreements may prescribe higher minimum contribution rates and higher maximum contributions bases.

A key technical change is the introduction of qualifying earnings (QE), which replaces ordinary time earnings (OTE) as the basis for calculating super guarantee contributions. QE is broader than OTE and includes:

• ordinary time earnings (OTE);

• all commissions paid to an employee;

• salary sacrifice amounts that would have qualified as earnings had they not been sacrificed to super; and

• earnings paid to workers captured under the expanded definition of employee (including certain contractors).

For full detail, refer to ATO guidance on qualifying earnings.

Employer reporting

Currently, employers are required to report either OTE or super liabilities to the government through the Single Touch Payroll (STP) system. Under the reform, employers will be required to report both QE and super liabilities through STP.

Employer action: ACT

To prepare for the transition, employers should ensure their payroll systems are updated to calculate super guarantee on each payday on the new broader basis of QE and make contributions quickly enough to meet the new seven‑day fund‑receipt requirement. This will require engagement with payroll software providers and a review of internal processes to ensure all data, including employee fund details, is accurate, complete, and up to date.

Employers should also assess the cashflow implications of moving from quarterly to per-pay-cycle super guarantee payments, as this will change the timing of outgoing superannuation liabilities.

Additional guidance for employers is available on the ATO’s website here (opens a new window).

Written in collaboration with:

Justin Bell

Head of Group Risk & Superannuation, People Solutions, Lockton Companies Australia

justin.bell@lockton.com (opens a new window)

Further Information

Payday superannuation announcements | Australian Taxation Office (opens a new window)