The Australian Government has announced a significant reform to the Superannuation Guarantee (SG) system. From 1 July 2026, employers will be required to pay their employees' superannuation at the same time as their salary and wages.
What is changing?
Currently, employers are required to pay superannuation guarantee contributions at least quarterly. While many employers already pay more frequently, the legal requirement allows for a significant lag between an employee earning their wage and their super fund receiving the contribution.
Under the new Pay Day Super model, superannuation must be paid on the designated "pay day". This means if you pay your employees weekly, you must remit super weekly. If you pay fortnightly or monthly, super moves to that same frequency.
Key Date: 1 July 2026
While the start date feels distant, the operational changes required to cash flow and payroll processing are significant.
Why is this happening?
The government has cited two main reasons for this reform:
- 1Reducing unpaid superThe ATO estimates billions in super goes unpaid each year. More frequent payments make it easier to track and enforce compliance, ensuring employees receive their entitlements.
- 2Compounding benefitsBy receiving super contributions earlier and more frequently, employees benefit from the compounding earnings of their super over time, potentially leading to higher retirement balances.
What operational impact will Pay Day Super have on employers?
Moving from quarterly to pay-cycle-based superannuation creates several challenges for payroll and finance teams, particularly where complex award interpretation rules affect contribution calculations:
Cash Flow Timing
Cash flow forecasting will need to adjust. Super liabilities will no longer be held for up to three months; they will leave the bank account immediately.
Clearing House Deadlines
Super clearing houses often require lead times of 3-5 days. Employers will need to ensure funds are initiated early enough to land in the fund by pay day.
How do I prepare for Pay Day Super?
Start by auditing payroll capability, modelling cash flow changes, and cleaning employee data ahead of the 1 July 2026 deadline. Even though 2026 is the cutoff, smart organisations are preparing now.
- Audit your payroll software capability: Ensure your core payroll processing platform can handle automated superstream generation per pay run. (Note: Affinity customers are already covered).
- Review cash flow models: Work with finance to model the impact of accelerating super payments.
- Check employee data quality: Frequent payments mean frequent rejections if fund details (USIs, member numbers) are incorrect. Clean your data now.
Is your payroll platform ready?
Affinity's automated superannuation engine is designed to handle Pay Day Super requirements seamlessly. We generate the files you need as part of the standard pay run process.
Check Affinity Payroll FeaturesPayday Super FAQs
What is Payday Super?
Payday Super requires employers to pay superannuation at the same time as salary and wages. It removes the lag between pay day and when super reaches an employee's fund.
When does Payday Super start?
Payday Super becomes mandatory from 1 July 2026.
How often will super be paid?
Super must be paid on each pay cycle, so weekly payrolls pay weekly and monthly payrolls pay monthly. The payment timing matches the employee pay frequency.
What should employers prepare for?
Employers should review payroll workflows, clearing house lead times, and cash flow timing. Data quality matters more with more frequent payments.