Preparing for Payday Super
The Australian Government has officially announced the launch of Payday Super on 1 July 2026, marking a significant shift in how superannuation contributions are handled. From this date, employers will be required to pay superannuation in line with payroll cycles, replacing the current quarterly payment schedule. This change is designed to bring more transparency, fairness, and timeliness to super contributions, ensuring employees receive their super as regularly as they are paid their wages.
While some businesses are concerned about the potential cash flow impact, the reform is seen as a positive step for the long-term. It places superannuation on the same level of importance as salaries, helping to prevent the accumulation of unpaid super—an issue that has affected many workers. The ATO has already flagged that they will take firmer action on unpaid GST, PAYGW, and super, making this reform part of a broader strategy to level the playing field for all businesses.
How Payday Super Benefits Employees and Businesses
This shift will benefit both employees and businesses in several ways:
Strengthening retirement savings: Employees will see more consistent contributions into their super accounts, improving their future financial security.
Creating a fairer business environment: Businesses that delay or miss super payments will face stricter compliance measures, which helps to level the playing field for those already following the rules.
Boosting the economy: Regular super contributions will inject more funds into the super system, encouraging long-term investments that support broader economic growth.
How to Prepare for Payday Super
With this significant change on the horizon, it’s important to prepare now, ensuring a smooth transition to the new system. Here are a few key strategies to get ready:
Set up a separate super account: For businesses who prefer to stick with the quarterly system until the official deadline, set aside super funds in a separate account when payroll is processed. This ensures you’ll have the funds ready when the due date arrives and helps avoid last-minute cash flow stress.
Start paying super with payroll: Start paying super with each payroll cycle now. By doing this ahead of the 2026 deadline, you can gradually adjust to the new system and minimise future cash flow disruptions.
Why This Change Matters for Business
Compliance: The ATO has already signaled that it will be stricter in enforcing compliance with super payments. Non-compliance with the new regulations could lead to penalties and other serious consequences.
Employee Trust: Paying super regularly strengthens the trust between employees and employers. It reassures employees that their retirement savings are being handled properly. In one tragic example we heard, an employer failed to pay super contributions or salary sacrifice. When that employee tragically passed away, their family was denied life insurance because the employee’s super account had been inactive for more than 16 months. The importance of keeping up with super payments cannot be overstated.
Cash Flow Management: While making super payments with payroll may seem daunting at first, it will ultimately lead to better cash flow management. By avoiding large lump-sum payments at the end of each quarter, businesses can plan ahead and stay on top of their finances.
Get Ready Now for a Smoother Transition
The shift to Payday Super represents a significant change in how businesses manage their payroll and super contributions. By preparing now, you can ensure you are ready for the 2026 deadline and position your businesses for success under the new rules.
At Cloudhouse, we can help you put in place processes to minimise the impact on your business. Ask us how we can assist you.