The superannuation landscape is changing. On 6 November 2025, two bills reforming Australia's superannuation guarantee (SG) framework received parliamentary approval. These changes, effective 1 July 2026, will significantly impact how employers manage and pay superannuation contributions.
If you manage a team, this affects your payroll. If you run a practice, this affects your compliance. Read on to understand what's changing and what you need to do.
What's Changing
The new Payday Super legislation introduces several key changes to the SG framework. Here are the headline items every employer needs to know:
⏰
Faster Payment Timeline:
Employers must now make SG contributions within 7 business days of payday (previously quarterly). This moves from a batching model to a per-pay-run model.
🧮
New Calculation Base:
Qualifying earnings (QE) replaces the old base, aligning with Ordinary Time Earnings (OTE) and including salary sacrifice amounts. This changes how you measure eligibility.
đź“Š
Annual Contributions Limit:
The maximum contributions base shifts from quarterly to annual calculations. SG contributions continue to accrue with each payday until the annual threshold is reached.
đź“ť
Simplified Compliance:
No more quarterly SG statements required. Employers submit voluntary disclosure statements before the ATO makes an assessment. Simpler reporting, but tighter timelines.
🤖
Automated Assessments:
The ATO will issue SG shortfall assessments automatically using data from Single Touch Payroll (STP) and super fund reporting. Less paperwork, more ATO oversight.
Implementation Timeline
Mark these dates on your calendar. The transition happens in stages:
October 2025
New SBSCH registrations ceased. Existing users must plan migration.
1 July 2026
Payday Super legislation comes into full effect. New payment obligations begin. SBSCH permanently closes.
1 July 2026–30 June 2027
First year ATO compliance period with risk-based approach (low, medium, high risk zones).
The ATO's First-Year Compliance Approach
The ATO has issued draft practical compliance guidelines (PCG 2025/D5) for the transition period. Rather than a blanket enforcement approach, they're using a risk-based model:
Low Risk Compliance
Minimal compliance scrutiny for employers demonstrating strong SG compliance practices from day one.
Medium Risk Compliance
Standard compliance review for employers with typical SG histories. Reasonable timeframes for correction.
High Risk Compliance
Enhanced compliance checks for employers with known SG issues or gaps in their records.
Your Position
Your category depends on current compliance. Early adoption puts you in the low-risk zone.
How This Impacts Your Business
Tax Deductions & Deductibility
The amended SG framework allows tax deductions for both on-time and late eligible contributions, plus the SG charge itself. However, be aware:
- General Interest Charge (GIC) on late payments remains non-deductible
- Late payment penalties related to the SGC remain non-deductible
- Only the core SG charge is deductible—penalties and interest are not
Cash Flow Impact
Perhaps the biggest impact: more frequent payments mean different cash flow timing. You're no longer batching SG into quarterly payments. With 7-day payment windows after every pay run, your cash flow changes immediately. If you pay weekly, you're sending SG weekly starting 1 July 2026.
⚠️ Critical Change: Plan your cash flow carefully. The shift from quarterly to per-payday contributions requires different financial management and tighter cash flow control starting 1 July 2026.
What You Need to Do Now
Time is running short. Here's your action checklist before 1 July 2026:
âś“
Audit your current SG compliance status—are you on-time or behind?
âś“
Review your payroll software—does it support per-pay-run SG contributions?
âś“
Update your super fund setup to ensure direct contributions are ready
âś“
Plan your cash flow for increased payment frequency
âś“
If using SBSCH, plan your migration to direct contributions now
âś“
Communicate with your super fund about the new arrangements
âś“
Ensure your accounting software integrates with payroll for accurate tracking
âś“
Train your payroll team on the new process and timelines
Get Expert Guidance on Payday Super
These changes are significant, but they're manageable with the right planning. Our team specializes in helping medical and allied health practices navigate tax and superannuation complexity.
Book a Free Consultation →
Key Takeaways
- 7-day payment window: SG is due within 7 business days of payday, not quarterly
- Qualifying earnings (QE): New calculation method replaces the old OTE base
- Annual limits: Maximum contributions base is now annual, not quarterly
- No more SG statements: Voluntary disclosure replaces quarterly lodgement
- Automatic ATO assessments: The ATO will flag shortfalls using STP data
- SBSCH is closing: Migrate to direct contributions before 1 July 2026
- Cash flow changes: More frequent payments mean tighter cash management
- Risk-based compliance: The ATO's first-year approach favors early adopters
The sooner you prepare, the smoother your transition. Don't wait until June 2026 to figure out your payroll system. Don't wait until July to realize your super fund isn't set up for direct contributions. If you have questions about how these changes affect your practice, your payroll, or your tax obligations, we're here to help.