Blog · Payroll & Super
Payday Super: what employers need to know (started 1 July 2026)
Payday Super has been in place for just over three months. If you employ staff, super is no longer a quarterly job. It's part of every pay run.
Most small businesses we work with on the Sunshine Coast have made the switch, but some aren't sure their payroll settings are right. This guide covers what changed, what it costs if you get it wrong, and how to stay on track.
What is Payday Super?
From 1 July 2026, employers must:
- pay super guarantee (SG) for each payday, instead of quarterly
- make sure the contribution is received by the employee's super fund within 7 business days after payday, with enough information for the fund to allocate it to the member's account
- calculate super on a new base called qualifying earnings (QE)
- report both QE and super liability through Single Touch Payroll (STP).
The changes were made by the Treasury Laws Amendment (Payday Superannuation) Act 2025.
What hasn't changed: who you pay super for (including contractors paid mainly for their labour), and the rate.
Super guarantee 2026: the rate is still 12%
The SG rate is still 12%, now applied to qualifying earnings instead of ordinary time earnings.
When do I pay super now?
The ATO calls the day you pay qualifying earnings the QE day. In most cases, that's your normal payday. The QE day is day 0, and the fund must receive the money within the next 7 business days.
A few points that catch people out:
- Business days exclude weekends and any public holiday that applies across a whole state or territory, even if it isn't a holiday in Queensland.
- The 7 days don't stretch if something goes wrong. A rejected payment or clearing house delay doesn't buy you extra time.
- "Received", not "sent". Allow for clearing house processing time. The ATO's advice is to pay super on payday.
When you get longer than 7 business days
| Situation | Deadline |
|---|---|
| First contribution for a new employee | 20 business days after the QE day |
| First contribution to a new fund for an existing employee | 20 business days after the QE day |
| Out-of-cycle payments (e.g. a one-off bonus or back pay paid outside the normal pay cycle) | 7 business days after the next regular payday |
| ATO exceptional circumstances determination (e.g. natural disaster, widespread IT outage) | Generally 20 business days (later dates can apply) |
Qualifying earnings: what changed?
Qualifying earnings is the new base for working out super. For most employers, the ATO says it doesn't change how much super you pay. Everything that counted towards super before 1 July 2026 still counts.
The main differences are:
- All commissions are now included, including commissions for work done entirely outside ordinary hours.
- Salary sacrifice amounts that would otherwise have been qualifying earnings are included, which is effectively the same as the old rule.
- Certain payments to people under the expanded definition of employee (such as contractors paid mainly for their labour) are included.
Check your award or agreement too, as it may require super on extra amounts.
The new super guarantee charge (SGC)
If super isn't received on time, the super guarantee charge applies. The regime has been redesigned from 1 July 2026.
| Before 1 July 2026 | From 1 July 2026 | |
|---|---|---|
| Who calculates it | Employer self-assesses and lodges an SG statement | ATO assesses it |
| Earnings base | Salary and wages | Qualifying earnings |
| Interest | 10% per annum | Notional earnings, compounding daily at the general interest charge rate |
| Admin component | Flat fee per employee | Administrative uplift of up to 60% of the shortfall plus notional earnings, which can be reduced |
| Choice of fund breach | Separate penalty | Choice loading of 25% of the contribution (capped at $1,200 per notice period) |
| Tax deductible? | No | Yes (but not GIC or late payment penalties on unpaid SGC) |
The uplift is reduced by 20 percentage points if you've had no ATO-initiated SGC assessment in the previous two years, and can be reduced further by lodging a voluntary disclosure statement before the ATO assesses you.
Penalties: if you don't pay an SGC assessment, the ATO can issue a Notice to Pay. If that isn't paid within 28 days, a late payment penalty of 25% or 50% of the unpaid charge applies, depending on prior penalties.
The key point: paying any outstanding super to the fund before the ATO issues an assessment reduces your SGC.
The ATO's approach in the first year
For 1 July 2026 to 30 June 2027, the ATO has said its focus is on helping employers get it right. Its approach is set out in Practical Compliance Guideline PCG 2026/1. It looks at your behaviour, not just the mistake:
- Low risk: you tried to pay on time and in full, something went wrong, and you fixed it as soon as reasonably practicable. The ATO doesn't expect to review these.
- Medium risk: you missed the deadline but everything was fixed within 28 days after the end of the quarter in which the wages were paid.
- High risk: amounts still unpaid after that point. This is where compliance action is focused.
This is not a grace period. The 7 business day rule and the SGC still apply. But if you're genuinely trying and fixing errors quickly, you're unlikely to be the ATO's focus this year.
The end of the Small Business Superannuation Clearing House
The ATO's Small Business Superannuation Clearing House (SBSCH) closed to new users on 1 October 2025. Existing users could use it until 30 June 2026, and it is no longer accessible. If you were still relying on it, you now need to pay through SuperStream-compliant payroll software, a commercial clearing house or another option listed by the ATO.
What to do in Xero
According to Xero Central, Xero has made these Payday Super changes:
- Qualifying earnings checkbox on pay items. Existing pay items were given a default setting. Check each one is correct, especially commissions, allowances and bonuses.
- QE column in reports. You can add a qualifying earnings column to the Payroll Activity Details and Summary reports to check amounts.
- STP reporting. QE and super values are included in your STP filings.
- Paying super as part of the pay run, plus an auto super overview page showing outstanding and at-risk payments.
- Alternative authorisers, so super can be approved if your usual authoriser is away.
- Employee self onboarding, so new staff can complete their super choice form themselves.
Our tip: approve the super payment on the same day as the pay run. For more, see our guide to getting the most from Xero.
Worked example: a café with weekly pays
A café pays its six staff every Wednesday. Weekly gross wages are $6,000, all qualifying earnings (ordinary hours, penalty rates and casual loading). There's no overtime.
Super each week: 6, 000 × 12720**
For the pay run on Wednesday 14 October 2026 (QE day), the super must be received by each fund by Friday 23 October 2026, which is 7 business days later, as there are no state-wide public holidays in that window.
| Quarterly (before 1 July 2026) | Payday Super | |
|---|---|---|
| Super per quarter (13 weekly pays) | $9,360 | $9,360 |
| When it leaves the bank | Once, by the 28th of the month after the quarter | $720 every week |
| Longest time super sat in your account | Up to about four months | About a week or less |
The total cost doesn't change, only the timing. Many businesses used super money as working capital for weeks or months. That buffer has gone. The same applies to a tradie with a couple of apprentices: pay weekly, and super goes out weekly.
Cash-flow impact
- Budget super as part of wages. Treat each pay run as gross wages plus 12%.
- Watch quiet months. Seasonal businesses no longer get a quarterly breather to catch up.
- Check July 2026. The final quarterly payment (April to June 2026) was due 28 July 2026, on top of the new per-payday payments. If you fell behind then, fix it now.
- Plan around your BAS. Super, PAYG withholding and GST now fall at different times. See our BAS and GST basics.
Payday Super checklist
How we help
As a registered tax agent with Xero L2 certification, we help employers get payroll right. We can:
- review your Xero pay items and QE settings
- set up super to be paid with each pay run
- manage your payroll, STP and super as part of our bookkeeping services
- help you fix missed payments and decide whether a voluntary disclosure statement makes sense
- build a cash-flow forecast that includes super through our business advisory work.
If you're not sure your super is on track, get in touch for a payroll check.
Frequently asked questions
When does Payday Super start?
1 July 2026. It applies to qualifying earnings paid from that date, even for work done before 1 July.
How long do I have to pay super under Payday Super?
The contribution must be received by the employee's super fund within 7 business days after payday. You get 20 business days for a new employee's first contribution, or the first contribution to a new fund.
Is the super guarantee rate still 12%?
Yes. The SG rate is 12%, now calculated on qualifying earnings rather than ordinary time earnings.
Can I still use the Small Business Superannuation Clearing House?
No. It was only available to existing users until 30 June 2026. Use your payroll software or another clearing house.
What happens if I pay super late?
The ATO assesses a super guarantee charge, which includes the unpaid super, notional earnings and an administrative uplift. Paying the fund before an assessment reduces the charge.
Is the super guarantee charge tax deductible now?
For paydays from 1 July 2026, yes. The SGC components are deductible. General interest charge and late payment penalties on an unpaid SGC are not. --- *