Introducing Payday Super – what you need to know

As payroll and superannuation landscapes evolve, one of the most significant changes on the horizon is Payday Super. If you’re an employer using solutions like CloudPayroll, now is the time to understand what this new reform means – especially knowing when Payday Super starts and how to get ready. This post gives you a clear overview: what Payday Super is, how it works and when it’s expected to begin.

What is Payday Super?

‘Payday Super’ refers to a reform proposed by the Australian Government that requires employers to pay their employees’ Superannuation Guarantee (SG) contributions at the same time as salary and wages. In other words, on pay day, instead of monthly or quarterly.

The aim is to modernise the superannuation system, reduce underpayments or delays in super payments, and give employees better transparency to their super contributions.

How does Payday Super work?

Under the proposed rules, each time an employer pays an employee a corresponding super contribution must be made so that the funds arrive within seven business days of that pay day. Here are key mechanics and considerations:

• New ‘due date’ per pay cycle: Rather than monthly or quarterly due dates, every pay cycle gives rise to a ‘due date’ (seven working days after payday) for the SG to reach the fund.
• Exceptions: Some irregular or off-cycle payments may be exempt from triggering a super due date until the next ‘regular’ pay day.
• Transition for new employees: An extended timeframe to pay contributions for the first time for an employee including new employees.
• Revised penalty regime: If contributions don’t arrive within the seven-day window, employers may incur updated Superannuation Guarantee Charge (SGC) penalties, interest and administrative uplift charges.
• Fund processing changes: Super funds will have a much shorter window (three business days) to allocate or return unallocated contributions (down from 20 business days).
• Closing of SBSCH: The Australian Taxation Office’s (ATO’s) Small Business Superannuation Clearing House (SBSCH) will close from 1 July 2026, meaning employers will need to use alternative clearing houses or direct payment mechanisms.

These changes require both employers and their payroll systems to become more precise and responsive, ensuring super contributions are aligned with pay cycles.

When does Payday Super start?

The big question is when does pay day super start? The Australian Government announced that from 1 July 2026, Payday Super law will take effect.

The ATO’s draft Practical Compliance Guideline sets out how employer compliance will be assessed in the first year of the reforms, categorising employers into low, medium or high-risk zones.

Industry bodies, including CPA Australia, The Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, The Institute of Certified Bookkeepers, SMSF Association and several other associations argue the industry is not yet ready and recommend extending the transitional relief period to give employers, particularly small businesses, time to adapt.

What employers should do now

Review and update payroll systems

Ensure your payroll software can align SG contributions with each pay cycle and support more frequent super payments. Explore CloudPayroll features to see how our system streamlines compliance.

Check your clearing house or payment method

If you rely on SBSCH you’ll need to find an alternative before your current access ends on 30 June 2026.

Clean up super fund data

Ensure all employees’ fund choice details are up to date to minimise refunds and rejections under the tighter processing windows.

Plan for cashflow impact

Paying super at each payroll cycle can affect cashflow more frequently. Make sure your forecasts and reserve management account for this.

Engage with advisors and stakeholders

Stay updated on legislation, industry guidance and software provider roadmaps.

Getting ready for Payday Super

Payday Super represents one of the most important changes to the superannuation system in decades – and for good reason. By aligning super contributions with pay cycles, the reform promises better transparency, earlier funding and a stronger safety net for employees. But this change also brings challenges for employers in terms of compliance, cashflow, system readiness and process discipline.

Employers using solutions like CloudPayroll should start preparing now so they can transition smoothly when Payday Super becomes law. Payday + 1 business day super payment option is now available in CloudPayroll. Contact our Support Teams to turn this feature on in your account.

If you’d like help reviewing your payroll readiness or integrating your software with these changes, let us know – we’re here to help. Request a callback and one of our payroll experts will get back to you shortly. Or visit CloudPayroll for more information.