Payday Super on the horizon

Employers are reminded that the Albanese government’s long-awaited “Payday Super” changes will come into force from 1 July 2026. 

Foreshadowed in the 2023-24 Budget but only passed by Parliament in November 2025, the incoming legislation will require employers to make occupational superannuation contributions at the same time as employees are paid their wages. An employee’s ordinary time earnings (OTE) will also become known as qualifying earnings (QE), which will include all traditional elements of OTE plus some other types of payments. The 12% super guarantee contribution will need to be made on an employee’s QE and must be paid to an employee’s super fund on payday and received by the super fund within 7 business days (unless an extended timeframe applies, such as for new employees).

The government has previously suggested that the shift to payday super will mean a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be about $6000 (or 1.5%) better off at retirement. The changes will also purportedly make it easier for the ATO to identify and pursue unpaid superannuation contributions, which constitutes a form of wage theft.

Employers are encouraged to familiarise themselves with the incoming Payday Super obligations by starting with the freely available resources prepared by the ATO, which includes fact sheets and checklists, along with guidance relating to which payments will constitute an employee’s qualifying earnings (replacing OTE) from 1 July 2026. In advance of July, businesses should also engage with their payroll software provider and super fund/s, many of whom have been rolling out free webinars since last year.