Be Payday Super ready

What is Payday Super?

Under the ATO’s Payday Super changes each time an employer pays an employee a corresponding super contribution must be made. Super funds must arrive at the employees’ superannuation fund within seven business days of their pay day.

SG under the Payday Super reform is calculated using the employee's qualifying earnings (QE) which summarises the employee’s ordinary time earnings (OTE) and other payments into one. Employee’s QE and super payment report must be submitted to the ATO via STP.

The reform promises better transparency, earlier funding and a stronger safety net for employees by aligning super contributions with pay cycles.

As a client of CloudPayroll start using our super management features now to prepare for Payday Super by making more regular payments. Our system currently supports monthly and Payday + 1 business day payments making it a powerful tool to help you transition to the new requirements.

Payday Super at a glance

Here are some key considerations:

• New 'due date' per pay cycle: superannuation must be paid the same day as salary and wages and received by the employee’s super fund within seven business days.
• Extended usual period (exceptions): there will be exceptions to the seven business day rule in situations outside the normal cycle. For example, onboarding new employees, out-of-cycle payments such as bonuses, or natural disasters where delays may be unavoidable.
• Single Touch Payroll (STP): employees' QE and super contribution will need to be reported to the ATO through STP.
• Revised penalty regime: if contributions don’t arrive within the seven-day window employers may incur Superannuation Guarantee Charge (SGC) penalties, interest and administrative uplift charges.
• Fund processing changes: super funds will have three business days to allocate or return unallocated contributions down from 20 business days.