Pay Day Super

Right now, employers can pay super quarterly. So if you pay wages weekly, you still only remit the super every three months (within 28 days of the end of the quarter). That gap creates a natural cash buffer in your business.

Under the new rules, from 1 July 2026, super must be paid at the same time as wages, or more precisely reach the fund within seven business days of payday.

That’s the short and curlies of it.

Because late super is rampant. Billions of dollars every year go missing, underpaid, or paid late. And quarterly cycles make it very easy to “borrow” super money to plug holes.

Payday Super removes that wiggle room and gives the ATO real-time visibility.

Under Payday Super:

• The ATO will see non-payment immediately
• Patterns of late payments will be obvious
• They can nudge, review, or investigate sooner
• Debts accumulate quicker
• Director Penalty Notices will follow faster

The entire system is being redesigned to flag non-payment in real time.

Here’s where the pain really kicks in, and I’ve written about before

Late super isn’t just “pay it when you can”.
Late super triggers the Superannuation Guarantee Charge (SGC), and SGC is ugly.

If you pay super late, you must:

1. Lodge an SGC form with the ATO
2. Pay interest of 10 percent
3. Pay an administration fee of $20 per employee, per quarter
4. Recalculate super on OTE plus overtime, which increases the liability
5. Lose the tax deduction for that super, forever

Let’s repeat that last point because it’s the kicker.

Late super is not tax deductible. Ever.

Paying super late is one of the fastest ways to:

• Create surprise tax bills
• Drain your cash flow
• Trigger director penalties
• Get stuck in an ATO payment plan

Under Payday Super, the frequency of payments goes up, but the consequences remain exactly the same. Except now the ATO will see your non-payment immediately instead of three months later.

This means faster action, faster penalties, and less time to fix mistakes before the ATO gets involved.

The real issue: cash flow

Let’s talk about the part most business owner’s underestimate.

Quarterly super gives you a buffer

Your cash flow system is currently used to paying super quarterly (or monthly or whatever you currently do).  So, any change to the norm, is going to create some waves. For some it will merely be a ripple for others a dumper.

So, get in front of this and prepare a 13-week cash flow forecast. Take last quarters cash ins & outs, and crtl + C, crtl V that into a new sheet, now move the super to each pay period, and have a look at the bottom line.

The total amount doesn’t change, but the timing does.  If you’re losing money, you’re going to lose it quicker. Christmas shut down 2027 just drained the bank accounts.

If you don’t know how to do a 13-week cash flow, pay someone who can, like us.

There’s a few other technical changes that you don’t really need to worry about unless you like obtuse definitions of things.

The only other big deal is the ATO Small business clearing house is shutting down. If you don’t know what that is, just scoll down to the next section because this has no impact for you.

For those that use the SBCH you need to find another solution, and that won’t be free. So, pick a clearing house, ideally something that works well (e.g automatically) with your accounting/payroll system and get yourself up to speed well before 1 July.

Payroll changes take time. So don’t leave it to the last minute.

Probably. Xero, MYOB, Employment Hero and the rest will update their systems. In fact, they’ve already been preparing.

But software can’t fix:

• Your cash flow
• Your payroll timing
• Your pricing
• Your business habits
• Your slow-paying customers
• Your bank account being empty on payday

The bottleneck is not the software.
The bottleneck is your cash flow discipline.

Yes, Pay Day Super will cause some disruption to your business as usual.  But look at the upside. Unpaid super is automatically a personal liability of the directors. No corporate veil will save you.  But if the super is squared away each pay run, then you as the director can’t be liable for it.

That’s a win.

• A cash flow forecast

Work out what this is going to do to the ebbs and flows of your bank balances. If you need to get a working capital facility to help fund shortfalls then speak to your lender early. They will want a cash flow forecast anyway.

• Start paying super more frequently now

If you pay quarterly today, move to monthly or fortnightly immediately.

Get your cash flow used to the new rhythm before it becomes mandatory.
Waiting until June 2026 will guarantee chaos.

• Build super into every payroll run

Think of super the same way you think of wages and PAYG withholding.
It’s not optional, not flexible, not “when I get to it”. Click the auto super button after you click file to STP.  Done, move on, don’t need to worry about it.

• Separate wages and super into different bank accounts from your transaction account

This forces discipline and stops accidental spending. Make sure there is enough cash in the wages, & super accounts each week to cover that week’s wages (even if you pay fortnightly or monthly).  Bonus points for also providing for the PAYG Withholding.

If you don’t prepare early, you will feel this change in your bank balance, and possibly in communications from the ATO.

Start now, ease yourself into the new rhythm, and by 1 July 2026 you’ll be the calm one while everyone else is melting down.