At a glance
- New rules from 1 July 2026 require superannuation to be paid with wages.
- The change will increase costs, administration, and cash flow pressure for small businesses.
- It aims to reduce unpaid super and boost employees’ retirement savings through compounding.
- Accountants must help clients update systems and processes to ensure compliance.
Payday Super will jolt small businesses – and their accountants – hard. The new superannuation rules coming mid-year will force a major shake-up in cash flow, systems and daily workflows.
From 1 July 2026, employers must pay super at 12% on the same day they pay wages. And funds must land in employees’ super accounts within seven business days.
Instead of paying super quarterly, payments will move in lockstep with the payroll cycle – monthly, fortnightly or even weekly. For some businesses, that means going from four super payments a year to as many as 52.
Payday Super will also apply to certain contractors under the extended definition of employees for super guarantee purposes. So businesses will need to check which employees are in scope.
Payday Super aims to ensure super is paid on time. Proponents say it will cut down on the billions in unpaid super that go missing each year, as well as better securing workers’ long-term savings. Treasury’s modelling suggests a median-earning 25‑year‑old could be around $6,000 better off in retirement just by having their super paid fortnightly instead of quarterly, thanks to the extra compounding time.
After 1 July, non-compliant employers will be held accountable, with the ATO tracking data in real time to detect missing or late super payments. Any non-compliers will incur charges and may be in breach of the Fair Work Act or an applicable award or enterprise agreement.
‘What’s in it for employers?’
But while the benefits of Payday Super are clear for employees, small business owners and accountants aren’t quite so excited.
“Businesses are going to say, ‘what’s in it for me?’,” says the IPA’s senior tax advisor, Tony Greco. “And the answer is, not much.”
For small businesses, the move means more administration, extra costs and tighter cashflow.
Greco says the shift is far more complicated than many people realise, especially for small outfits.
“It’s far more complex than paying wages,” Greco explains. “You’ve got a plethora of different funds that the money goes to, you need a clearing house [to split and distribute funds] plus the software has to do its magic. Some clearing houses take three to seven days to clear funds. There’s a lot of processes and steps that have to take place.”
Adding to the headache, the ATO is shutting its free Small Business Superannuation Clearing House, which can’t support real-time Payday Super. That’s a blow for the 250,000 small businesses using it, which will now need to switch to paid commercial clearing houses or direct payments to funds themselves, likely hiking their expenses.
Greco says that for small businesses who manage their own payroll and payments, Payday Super will require a lot more time; for those who use bookkeepers or accountants, it will mean higher fees.
Then add system upgrades, new software, workflows and processes on top.
‘No-one wants more costs’
“There’s going to be a cost associated with this, and no one wants more costs,” Greco says. “That’s why we asked for more time.”
The IPA, along with other industry groups, backed the reforms but called for a delayed rollout for smaller businesses, such as those with fewer than 20 employees. Greco says that would have given those business breathing room for payroll tweaks, adjustments to cashflow budgets and updated processes to ensure super payments could flow smoothly through the system.
“Small businesses need more help,” he says. “They don’t always have specialist HR or IT people.”
However, the government rejected a staggered approach and proceeded without changes, with all businesses moving to Payday Super at the same time.
Preparing for the change
The ATO urges businesses to review payroll systems and processes now. It urges them to speak with payroll software providers, accountants or registered tax professionals.
Australia’s Tax Ombudsman, Ruth Owen, told the IPA accountants bear a big responsibility in helping clients prepare.
“Businesses are going to say, ‘what’s in it for me?’. And the answer is, not much.”
Tony Greco
“It’s going to be a big change for accountants to help their clients gear up for Payday Super,” she says. “They need to make sure their clients are using superannuation clearing houses effectively so they’re confident that the liability and the responsibility is with the employer, not with the accountant, clearing house or super fund.”
She urges everyone coming back from the Christmas break to “really focus on being ready for that change in July”.
The IPA is also on hand to help. It will reach out to members over coming weeks and months with practical tips for their own business and to help educate their clients.
“Our members play a critical role in helping small businesses stay compliant,” Greco says. “We want to ensure they’re equipped with the right information and tools well ahead of the change.”
“We’ll help them assess what processes they have in place at the moment, and what changes they can implement.”
Steps in the preparation may include changing clearing house options, confirming that software handles digital super processing, or shifting from weekly to fortnightly or monthly pay cycles.
“It is a big change. And like most big changes, preparation is key,” adds Greco.
“Doing a stock take of what you have versus what you need is part of the planning. Accountants and small businesses need to put those steps in place so they’re compliant and have the new workflow built into their cycles come July.”
Learn more about how the IPA is advocating for the profession here.
