A significant reform will be implemented later this year to Australia’s superannuation system.
Currently, employers pay employees’ superannuation at least every 3 months. However, from 1 July 2026 employers must pay employees’ superannuation on payday – that is, within 7 business days of payment of wages or salaries. There are exceptions such as for new employees.
The government has introduced a new term, qualifying earnings (QE), which includes:
- Ordinary time earnings (OTE)
- Commissions paid to an employee
- Salary sacrifice contributions
- And other earnings paid to employees including payments to independent contractors
Employers will use QE to calculate super guarantee, and super guarantee will be paid at the same time as QE.
Key changes
Calculating super guarantee amounts
There will also be changes to the calculations of super guarantee. Now the amount is calculated as 12% of OTE. From 1 July 2026, the amount will be calculated as 12% of QE.
Late payments and super guarantee charge (SGC)
SGC will apply when super guarantee amounts are not received within 7 business days of payday. The SGC includes interest that compounds daily at the general interest charge rate and, compared to the current law, is tax deductible.
Reporting
Currently, employers report either OTE or super liability through Single Touch Payroll. However, from 1 July 2026 employers must report both QE and super liability through STP.
Penalties
The Australian Taxation Office is the main enforcer for the compulsory super guarantee and implementing the new rules. Non-compliance with the new rules will entail penalties of 25% or 50% of unpaid SGC.
With these new changes that are soon to come into force from 1 July 2026, employers should ensure they are compliant and pay super at the same time as wages. Businesses should review payroll systems and super processes, and ensure that super is paid on payday. SuperStream data and payment standards will be updated to allow near real-time payments and improve systems to reduce risk of delayed payment.
Our Services
At OpenLegal, we are equipped to provide our clients with comprehensive advice regarding matters in employment law. To learn more about ensuring compliance with Payday Super, contact OpenLegal at enquiries@openlegal.com.au or 1300 937 574 for a confidential consultation to discuss your circumstances.
Anneka Tan, Intern at OpenLegal