Payday Super explained: What’s changing and how to prepare
Big changes are coming to superannuation in Australia. BDO explains what to expect.
From 1 July 2026 all employers, employees, and self-managed superannuation fund (SMSF) members will be subject to these new legislated rules.
What is Payday Super?
Payday Super requires employers to pay super guarantee (SG) contributions at the same time as salary and wage payments. Quarterly payments will no longer apply, and contributions must be received by the employee’s super fund within seven business days of their payday (unless an extended timeframe applies, such as for new employees).
To help you prepare, here are the key requirements:
- Super must be calculated at 12 per cent of Qualifying Earnings (payment for ordinary hours of work, commissions and salary sacrifice amounts)
- The new timeframes and contribution processes apply to all employers, including companies, sole traders, partnerships, and trusts
- Super funds must allocate contributions to members’ accounts (or return them to the employer if the contribution cannot be accepted) within three business days of receiving them
- To receive contributions from an employer, your SMSF must have an active Electronic Service Address (ESA) and be SuperStream compliant.
How will this affect SMSFs?
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- The Australian Taxation Office (ATO) has indicated that approximately 366,000 individuals in 244,000 SMSFs are impacted, particularly those receiving employer contributions from unrelated employers
- SMSFs receiving contributions from related employers must comply with the new timeframes, but the new SuperStream electronic data requirements are not mandatory.
Key obligations from 1 July 2026
| Action | Timeframe |
|---|---|
| Employer payment to super fund | Within seven business days of payday |
| Fund action (allocate or return funds) | Within three business days of receipt |
Important notes
- If a contribution is rejected, employers will still have just the original seven-business-day window to rectify the issue and re-submit payment to avoid the super guarantee charge (SGC)
- Strict penalties, including daily interest, will apply for missed, late, or underpaid super
- The ATO will closely monitor all superannuation contributions, with a particular focus on related-party transactions, to identify and prevent non-arm’s length arrangements.
Exceptions
- SuperStream is not required for sole traders paying their own super or where the employer and SMSF are related parties.
Changes to SG rates and contribution caps
As part of the broader changes to superannuation, employers should be aware of updates to both the SG rate and the Maximum Contribution Base (MCB). Key details include:
- From 1 July 2025, the minimum SG rate increased to 12 per cent of ordinary time earnings
- For 2025-26, the MCB is set at $62,500 per quarter
- From 1 July 2026, the annual MCB will shift to an annual limit (expected to be $270,833)
- Employers must pay SG on all eligible earnings up to the annual MCB, creating a maximum SG liability of $32,500 per employee for the 2026-2027 financial year. Once an employee reaches the threshold, SG contributions can cease for the remainder of that year
- SG eligibility applies to all employees aged 18 and over, regardless of their earnings. Employees under 18 qualify if they work at least 30 hours per week.
What do you need to do?
To ensure compliance with the upcoming changes, both SMSF trustees and employers should review their obligations and take the following steps.
Stay informed, daily
SMSFs: Ensure your fund has a valid Electronic Service Address (ESA) and that your SMSF annual return is lodged on time. If the annual return is overdue, the ATO may remove the fund’s regulated status, meaning the SMSF will be ineligible to receive contributions or rollovers.
Employers:
- Update payroll systems to reflect the new payday super timing and reporting requirements, and maintain accurate records of all super contributions
- Where employers are related or connected entities, ensure thorough documentation is retained to demonstrate compliance and avoid non-arm’s length transaction issues.
How BDO can help
As these changes approach, it’s important to understand how they may affect your obligations and planning.
Our superannuation team will continue to provide updates and guidance as 1 July 2026 nears. If you have questions about how Payday Super affects you or your SMSF, contact your BDO adviser. Our team is here to guide you through the updates and ensure you’re prepared for the changes.
Disclaimer:
The information contained in this publication is purely factual in nature and does not take into account your personal objectives, financial situation or needs. It is provided as an information service only and does not constitute financial product or other professional advice and should not be relied upon as such. Before making any investment or financial decisions you should consider your particular objectives, and financial circumstance or needs.
Where information relates to a particular financial product you should obtain and consider the relevant Product Disclosure Statement and obtain advice from a financial adviser before making any decision. If you do require financial advice, please contact the relevant BDO member firms in Australia who will be able to assist you in their capacity as an Australian Financial Services licensee. Each BDO member firm in Australia, their partners and/or directors, employees and agents do not give any warranty as to the accuracy, reliability or completeness of information contained in this publication nor do they accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it, except in so far as any liability under statute cannot be excluded.
BDO refers to one or more members of a national association of separate entities who are all members of BDO International Ltd, a UK company limited by guarantee. Each BDO member firm in Australia is a separate legal entity and has no liability for another entity’s acts and omissions. Liability limited by a scheme approved under Professional Standards Legislation.
BDO is the brand name for the BDO network and for each of the BDO member firms.
© 2026 BDO Australia Pty Ltd. All rights reserved.
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