Tax Facts

Your guide to employer super obligations — current rules and upcoming changes

Overview

As an employer, you are required to pay superannuation contributions on top of your employees’ wages and salaries. This compulsory payment is called the Superannuation Guarantee (SG).

The rules are changing significantly from 1 July 2026. This guide explains how things work now and what will be different from that date.

Current Rules — Up to 30 June 2026

Who must receive super?

You must pay super for an employee if they are:

• Over 18 years old (there is no upper age limit), or
• Under 18 years old and work more than 30 hours in a week.

There is no minimum earnings threshold — even part-time and casual workers qualify. Note that the definition of ’employee’ for super purposes also includes certain contractors, so it is worth checking with your accountant if you engage contractors.

How much must you pay?

Ordinary Time Earnings (OTE) is generally your employee’s regular pay for their normal hours — it does not include overtime. There is a maximum earnings base, so contributions are not required above a certain salary threshold.

When must you pay?

Under the current rules, super must be paid within 28 days after the end of each quarter:

Important: The contribution must actually be received by the employee’s super fund by the due date — not just sent.

Choice of fund

You must offer eligible employees a choice of superannuation fund. If an employee does not choose a fund, you must check whether they have a ‘stapled fund’ (an existing super account linked to them) via the ATO before paying into a default fund.

What if you miss a payment?

If you don’t pay the full amount on time, you become liable for the Superannuation Guarantee Charge (SGC). This is more costly than simply paying the super on time because it includes:

• The unpaid contributions — calculated on a broader earnings base than OTE (so the amount owed may be higher than expected)
• An interest charge of 10% per year (this is credited to your employee’s super account)
• An administration fee of $20 per employee per quarter

The SGC is not tax-deductible, unlike regular super contributions. You must also lodge an SGC statement with the ATO.

Tip: It is always cheaper to pay super on time than to pay the SGC. If you are having cash flow difficulties, you should speak with your accountant before a payment is missed.

What’s Changing — Payday Super from 1 July 2026

Payday Super is the biggest change to Australia’s superannuation system in decades. From 1 July 2026, employers will no longer be able to pay super quarterly. Instead, super must be paid every time you pay your employees’ wages.

The new rule in plain English

Every time you run payroll and pay your employees, you must also pay their super at the same time. The super contribution must be received by the employee’s super fund within 7 business days of the payday.

Example: If you pay wages on a Friday, the super must land in the employee’s fund by the following Friday (allowing for business days).

What’s changing with the rate calculation?

The way super is calculated is also changing. The term ‘Ordinary Time Earnings’ (OTE) is being replaced with a new term: ‘Qualifying Earnings’ (QE). For most employees, the amount you pay will be the same. However, QE has a broader definition and includes:

• All commissions (not just those for ordinary hours)
• Some payments to contractors

The rate stays at 12%.

Summary of key changes

Penalties for late payment under the new rules

The SGC still applies if you miss the 7-business-day deadline. However, the consequences are more immediate because the ATO will have real-time visibility through Single Touch Payroll (STP) reporting. Penalties can reach up to 200% of the unpaid amount in serious cases.

The ATO has indicated it will take a softer approach during the first year (1 July 2026 – 30 June 2027) for employers who are genuinely trying to comply and who fix errors promptly. However, deliberate non-compliance will still be pursued.

The Small Business Clearing House is closing

The ATO’s Small Business Superannuation Clearing House (SBSCH) will close on 1 July 2026. If you currently use it to pay super, you must move to a SuperStream-compliant payroll solution before then. Speak with your payroll software provider or accountant to make the switch in time.

What you should do now

• Check your payroll software — confirm it will support Payday Super from 1 July 2026 and contact your provider if unsure.
• If you use the SBSCH — start planning your move to an alternative clearing house or payroll solution now.
• Review your cash flow — paying super every payday instead of quarterly is a significant change to timing. Money that used to sit in your account for up to 3 months will now need to go to the fund much sooner.
• Update your onboarding process — make sure new employees’ super fund details are set up before their first payday, as you’ll need to pay super immediately.
• Talk to your accountant — they can help you prepare and ensure your systems are ready in time.

The transition to Payday Super is not optional. You should start preparing now to avoid penalties and cash flow surprises from 1 July 2026.

ATO Tools and Resources

The ATO provides the following tools to help you understand and meet your super obligations:

• Superannuation Guarantee Charge (SGC) statement and calculator — calculate your SGC liability and prepare the SGC statement
• Employee or contractor decision tool — determine whether a worker is an employee or contractor for super purposes
• Super guarantee eligibility decision tool — check whether you need to pay super for a particular worker
• Super guarantee contributions calculator — calculate how much super to pay for each eligible employee

Source: Australian Taxation Office (ato.gov.au). Payday Super legislation is subject to finalisation — always verify current requirements with the ATO or your accountant. This document is a general guide only and does not constitute financial or legal advice.