Get Ready for Same Day Super
The government is making changes to the superannuation guarantee (SG) system, which requires employers to pay superannuation contributions for their employees.
One of the proposed changes is to require employers to pay super on the same day as salary. This is to make it easier for employers to comply with the SG system.
The Australian Government announced a couple of months ago that from 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages.
The introduction of payday super could make it simpler to meet your super obligations. Paying super on the same day as your employees’ regular pay could potentially help:
- lower the likelihood of missing super payments.
- reduce your business’s payroll liabilities; and
- make your business’s payroll system more streamlined and manageable.
The start date will provide employers, super funds, payroll providers and other parts of the superannuation system with sufficient time to prepare for the change. Although this measure is not yet law business owners are urged to start planning and preparing for this change.
Moving to payday super could help your business avoid incurring the SG charge due to unpaid super. This charge, which is not tax deductible, can be a significant financial burden for employers.
While the requirement does not come into place until 2026, you can consider shifting to payday super ahead of time. This is up to you as an employer, but it could help you get ahead of any regulatory changes before they come into effect.
Most employers do the right thing and follow the SG rules. However, some employers fail to meet their super obligations.
Unpaid super amounted to $3.4 billion in the 2019-20 financial year, according to ATO estimates. Payday super aims to make it easier for your employees to track the super contributions you make to their super fund. This is especially important for low-income workers and those relying on insecure work, many of whom are women.
Government analysis found that under the proposed new rules, a 25-year-old worker on the median income who currently receives their super quarterly and wages fortnightly could be about $6,000 or 1.5% better off when they retire.
The government will provide the ATO with additional resourcing to help it detect and address unpaid super cases sooner. The change may also mean the ATO can act earlier when an unpaid super complaint is lodged.
Another proposed change is to introduce a fairer and more proportionate penalty regime for late payments. This means that employers who accidentally make a late payment will not be penalised as heavily as employers who deliberately do not pay SG contributions.
These changes are designed to make the SG system more efficient and fairer for everyone.
Here are some key points for business owners to keep in mind:
- You will be required to pay super on the same day as salary from 1 July 2026.
- If you accidentally make a late payment, you will only be charged interest.
- If you deliberately do not pay SG contributions, you will be subject to graduated penalties.
Hopefully the government will introduce a graduated penalty regime that is lenient on infrequent late-paying employers and is harsh on deliberate non-paying employers. This would be a fairer and more proportionate way to penalise employers who do not meet their SG obligations.
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Have a great day!
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