Jun 15, 2026 Joel Hernandez

Payday Super – Tips and Traps

From 1 July 2026, employers will be required to pay their employees’ superannuation at the same time as wages, aligned to each payroll cycle. The major shift is that super contributions will need to be received by the employee’s super fund within 7 business days of payday.

Because all payroll information is reported through Single Touch Payroll (STP), the ATO will have real time visibility over employer compliance. With the start date approaching, employers need to be prepared.

Tips and Traps

1. Use payroll software that supports automation

Choose payroll software that can automate calculations, payments, and reporting. Automation reduces the risk of late payments and helps ensure contributions reach the fund within the required timeframe.

2. Understand the new terminology – “Qualified Earnings”

Super is now payable on an employee’s Qualified Earnings.

This definition closely aligns with the previous Ordinary Time Earnings (OTE) but has been expanded to include additional forms of remuneration — for example, commissions earned outside ordinary hours. Employers should review their pay categories to ensure correct classification.

3. Pay on time — and build in a buffer

Because super must be received by the fund within 7 business days, employers may need to initiate payments a few days earlier. Superfund processing and allocation times vary, so leaving payments to the last minute increases the risk of breaching the deadline.

4. Pay as soon as possible if you fall behind

If contributions are late, paying them quickly still helps.

Eligible late contributions will automatically reduce the Superannuation Guarantee (SG) shortfall, although “notional earnings” (an interest-like penalty) will still apply. Acting promptly can significantly reduce the overall liability.

5. Consider voluntary disclosure

If you identify an issue, lodging a voluntary disclosure within 30 days of the payroll cycle day and before the ATO issues an assessment can increase the likelihood of a full remission of administration penalties.

6. Expect more ATO initiated assessments

With real time STP data, the ATO can easily identify missed or late superannuation contributions.

An ATO initiated Super Guarantee Charge (SGC) assessment will generally be more expensive than simply paying the shortfall yourself, due to:

• Notional earnings
• Administration fees
• Penalty uplift for longer periods of non compliance

Avoiding ATO intervention is always the cheaper path.

7. Be aware of allowable extensions

There is a 20 business day extension for super contributions when:

• A new employee is onboarded, or
• An existing employee changes their nominated super fund
• This provides some flexibility during these payroll transitions.

8. Understand tax deductibility

The on-time SG contribution, late SG contribution and the SG Charge are tax deductible.

However, late penalties and general interest charges (GIC) typically associated with the ATO initiated assessments are not deductible.

Conclusion

The ATO recognises that employers will face challenges as they transition to Payday Super. The key message is: don’t panic. If a payment is late, act quickly — pay the super as soon as possible and before the ATO initiates its own assessment. Early action can significantly reduce penalties and administrative costs.