Payday Super is a new law that changes how businesses conduct payroll activities. As of July 2026, all companies in Australia are required to pay employee superannuation contributions within seven business days of paying salary and wages (or qualified earnings).
Payday Super: What does it mean?
Due to the way superannuation contributions are regulated and paid, Payday Super increases the administrative burden on businesses. To make a payment of a super contribution, businesses need to use superstream-compliant services, known as super clearing houses, to disperse their employee contributions. These super clearing houses take the uploaded payment and employee data and submit them to employee-designated super funds, who notify both the employee and the ATO of payment.
While this is mostly automated, what makes Payday Super difficult for small businesses is that the super clearing house service the ATO provides will be decommissioned by 1st July 2026. This means small businesses will need to find their own solutions to remain compliant. Strict penalties apply for non-compliance.
Key takeaways
Changes to superannuation contributions:
The law change puts into effect a shorter deadline for superannuation contributions. Under the old convention, businesses had until the end of the financial quarter to submit their employee super contributions. This will no longer be the case, as super contributions are now expected within 7 business days of qualifying earnings.
Closure of the ATO’s Small Business Super Clearing House (SBSCH):
Part of the Payday Super changes is the closure of the free ATO super clearing house. The SBSCH was a service that allowed small businesses to upload their employees' superstream and employee superannuation contribution payments are to be dispersed to their employee super funds. Businesses that use this service will need to find a commercial solution to remain compliant with the new changes.
Harsher penalties for missed super payments:
The penalty (superannuation guarantee charge) for missed super payments has increased:
- The outstanding SG shortfall will be calculated based on an employee’s notional earnings.
- The shortfall will incur daily interest on a compounding basis.
- An administrative charge of 60% of the shortfall in the SG will apply.
- Additional charges will be levied after an ATO assessment if the full amount of the SG charge has not been paid within 28 days.
To communicate – in no uncertain terms – the importance of businesses submitting their employees’ super contributions on time, the ATO will levy the SG charge immediately if contributions aren’t made within the seven-business-day timeframe, no exceptions.
How to stay compliant: small business solutions
To stay compliant, businesses must make payment of their employee super contributions within the new timeframe. Unfortunately, this comes with increased administrative tasks, as businesses that pay salaries and wages monthly, fortnightly, or weekly would need to make super contributions 12, 26, or 52 times a year instead of 4.
With the ATO SBSCH being decommissioned, there are no free options for small businesses to submit super contributions to a super clearing house You may be able to use your default super funds’ own super clearing house solution in place of SBSCH - check with them directly for confirmation.
For more information on Payday Super, the SBSCH closure and how to stay compliant, visit the ATO.
