--- title: "Payday Super: The Employer's Operating Guide for 2026-27" description: "Payday super since 1 July 2026: the 7 business day rule, qualifying earnings, the new SG charge, and what to do when a contribution is rejected or late." image: https://42advisory.com.au/hubfs/accountants-melbourne-42-advisory.webp --- [Skip to Content](https://42advisory.com.au/42-advisory-blog/payday-superannuation-legislation-employers-guide#body) [![42\_Advisory\_Logo\_Header](https://42advisory.com.au/hubfs/42_Logo_Header.svg "42_Advisory_Logo_Header")](https://42advisory.com.au/) Toggle Menu - Accounting & Tax Toggle children for Accounting & Tax - [Small Business Accountants](https://42advisory.com.au/services/small-business-accountant-melbourne) - [Personal Tax Returns & Advice](https://42advisory.com.au/services/personal-tax-accountant-melbourne) - [BAS & IAS Lodgement](https://42advisory.com.au/services/bas-ias-accountant-services-melbourne) - [Tax Compliance](https://42advisory.com.au/services/small-business-tax-compliance-melbourne) - [SMSF Accountants](https://42advisory.com.au/services/smsf-accountant-melbourne) - [Property Tax](https://42advisory.com.au/services/property-tax-accounting-melbourne) - [Bookkeeping](https://42advisory.com.au/services/small-business-bookkeeping-melbourne) - [CPA Accountants & Business Advisors](https://42advisory.com.au/services/cpa-accountant-melbourne) - [Local Accountants](https://42advisory.com.au/accountants) - Business Advisory Toggle children for Business Advisory - [Business Advisory & 3-Way Forecasting](https://42advisory.com.au/services/business-advisory-forecasting) - [Tax Planning](https://42advisory.com.au/services/tax-planning-melbourne) - [R&D Tax Incentive Services](https://42advisory.com.au/services/r-and-d-tax-incentive) - [Business Valuation](https://42advisory.com.au/services/business-valuations) - [Buying a Business](https://42advisory.com.au/services/buying-a-business-due-diligence-melbourne) - [Finance Broking Overview](https://42advisory.com.au/finance/) - [Residential Finance](https://42advisory.com.au/finance/residential-finance-services-melbourne) - [Commercial Finance](https://42advisory.com.au/finance/commercial-finance-services) - [Asset Finance](https://42advisory.com.au/finance/asset-finance-solutions) - Industries Toggle children for Industries - [Accounting for Doctors](https://42advisory.com.au/industries/accounting-advisory-for-doctors-dentists-health-practices) - [E-Commerce & Online Retail](https://42advisory.com.au/industries/ecommerce-accountants-melbourne) - [Tech, SaaS & IT](https://42advisory.com.au/industries/tech-saas-accounting) - [MMA, BJJ & Muay Thai Gyms](https://42advisory.com.au/industries/martial-arts-combat-sports-gym-accountants-melbourne-42-advisory) - [Cafés, Restaurants & Retail Stores](https://42advisory.com.au/industries/cafés-restaurants-retail-stores) - [Crypto Tax for Investors & Traders](https://42advisory.com.au/industries/crypto-tax-accounting-for-investors-traders) - [Builders, Contractors & Trades](https://42advisory.com.au/industries/builders-tradies-accountants-melbourne) - [Startup Accounting & Advisory](https://42advisory.com.au/industries/startup-accounting-advisory-services-melbourne) - [Professional Services Firms](https://42advisory.com.au/industries/professional-services) - [Automotive & Mechanical Services](https://42advisory.com.au/industries/automotive-accountants-melbourne) - [About Us](https://42advisory.com.au/about) - [Contact Us](https://42advisory.com.au/contact-us) - [Resources](https://42advisory.com.au/42-advisory-blog) - [(03) 9997 7081](tel:0399977081) [back to blog](https://42advisory.com.au/42-advisory-blog) # Payday Super: The Employer's Operating Guide for 2026-27 Read Time **40 mins** ![](https://42advisory.com.au/hubfs/accountants-melbourne-42-advisory.webp) TL;DR Payday super has applied since 1 July 2026. Super guarantee contributions must reach the employee's fund within 7 business days of payday, calculated as 12% of qualifying earnings. Miss the date and the ATO assesses a super guarantee charge per payday, without a lodged statement. The charge is deductible; the administrative uplift starts at 60% and can fall to nil. The clock does not start when your clearing house sends the money. It starts on payday, and it stops when the fund can allocate the contribution to the member's account. Everything in between, including a rejected payment you have not noticed, is your risk. Payday super commenced on 1 July 2026 under the [Treasury Laws Amendment (Payday Superannuation) Act 2025](https://www.legislation.gov.au/C2025A00057/asmade) (Act No. 57 of 2025, assented 6 November 2025) and the Superannuation Guarantee Charge Amendment Act 2025. Most guidance written before that date told employers to prepare. This guide is written for the position now: what the rules require each pay run, what the super guarantee charge actually costs, and what to do the day a contribution comes back. We prepare payroll and manage super compliance for Melbourne businesses across hospitality, construction, healthcare and professional services. The errors we see three months into the regime are not calculation errors. They are timing errors and unread error messages. Payment window 7 business days From payday to fund receipt and allocation SG rate 2026-27 12% Of qualifying earnings for each QE day Administrative uplift 60% to 0% Reducible by history and voluntary disclosure Maximum contribution base $270,830 Annual for 2026-27, capping SG at $32,499.60 ## What Is Payday Super and When Did It Start? Payday super started on 1 July 2026. Employers must pay superannuation guarantee at the same time as salary and wages, and the contribution must be received by the employee's super fund within 7 business days of that payday. It replaced the quarterly system for all employers, with no phase-in and no small business exemption. The reform changed three things at once: when you pay, what you calculate super on, and how the ATO deals with you when you get it wrong. The [ATO's comparison of the old and new rules](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/about-payday-super) is the clearest summary of the shift. | Element | To 30 June 2026 | From 1 July 2026 | | --- | --- | --- | | Deadline | 28 days after quarter end | 7 business days after each payday | | Calculation base | Ordinary time earnings | Qualifying earnings | | Who assesses the charge | Employer self-assesses and lodges an SG statement | ATO calculates and issues an assessment | | Interest | 10% per annum, plus a flat administration fee | Notional earnings compounding daily at the GIC rate, plus an administrative uplift | | Deductibility of the charge | Not deductible | Deductible | | Fund allocation window | 20 business days | 3 business days to allocate or return | | Penalties | Up to 200% of the charge, remittable | 25% or 50% of unpaid charge, not remittable | The [Small Business Superannuation Clearing House closed permanently on 1 July 2026](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/payday-super-resources/how-to-transition-from-the-small-business-superannuation-clearing-house), with login access disabled after 11:59pm AEST on 30 June 2026. If you have not yet downloaded your historical payment instructions and employee records, those records are no longer retrievable from the ATO portal. That is a record-keeping problem worth raising with whoever handles your [payroll and bookkeeping](https://42advisory.com.au/services/small-business-bookkeeping-melbourne). ## How Many Days Do Employers Have to Pay Super? Contributions must be received by the employee's super fund, with enough information to allocate them to the member account, within 7 business days after payday. Payday is day 0. A business day excludes weekends and any day that is a public holiday across a whole Australian state or territory, wherever the employer is located. Two details in that rule cost employers money. The first is that the test is receipt by the fund, not payment by you. The [ATO's payment deadline guidance](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-on-payday/payment-deadlines-for-payday-super) states plainly that the timeframe does not change if there is an error or delay in processing. If your clearing house takes four business days, you have three, not seven. The second is the definition of a business day. A public holiday that applies across a whole state or territory is not a business day for payday super purposes, even if your business is in another state. Picnic Day in the Northern Territory extends the deadline for a Melbourne employer. A holiday that applies to only part of a state, such as Royal Hobart Show Day, does not. From 1 July 2026 the New Payments Platform can be used for super contributions, and payments routed through it can reach the fund the same day. If your payroll software or clearing house supports it, that single change removes most of the timing risk from the 7 day window. ## What Are Qualifying Earnings? Qualifying earnings are the payments super guarantee is calculated on from 1 July 2026. They include all ordinary time earnings, all commissions including those earned entirely outside ordinary hours, salary sacrificed super amounts, and specified payments to workers caught by the extended employee definition. Overtime remains outside qualifying earnings where ordinary hours are clearly identified. For most employers the amount of super payable did not change. Qualifying earnings carry over everything that was in ordinary time earnings, then add two things. Commissions are the one that catches people: under the old rules a commission earned outside ordinary hours was arguable, and now [all commissions are qualifying earnings](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-on-payday/what-payments-are-qualifying-earnings). Sales teams, real estate agencies and recruitment firms should check their pay codes. | Payment | Qualifying earnings? | | --- | --- | | Ordinary hours, casual loading, shift penalties | Yes | | All commissions, however earned | Yes | | Annual, personal and long service leave taken | Yes | | Task allowances (skills, conditions, retention) | Yes | | Salary sacrificed super amounts | Yes | | Overtime where ordinary hours are clearly identified | No | | Expense allowances expected to be spent in full | No | | Employer and government paid parental leave | No | | Unused annual and long service leave on termination | No | | Jury duty, community service and defence reserve leave | No | The ATO has issued draft Law Companion Ruling LCR 2026/D1 on qualifying earnings. Where a pay code sits close to the line, particularly allowances that only partly reimburse an expense, the draft ruling is the place to start rather than the award. Employers also now report year to date qualifying earnings and year to date super liability for each employee through Single Touch Payroll with every pay run. From 1 July 2027 reporting that omits those labels will be rejected. Where an award or enterprise agreement requires super on amounts wider than qualifying earnings, that industrial obligation still stands. Payday super sets the statutory floor, not the ceiling. Hospitality and construction employers with [award-driven payroll](https://42advisory.com.au/industries/caf%C3%A9s-restaurants-retail-stores) should reconcile the two. ## When Do Employers Get Longer Than 7 Business Days? Four situations allow more than 7 business days: the first contribution for a new employee or to a new fund (20 business days), out of cycle payments such as bonuses and back pay (due with the next regular payday), an ATO exceptional circumstance determination (20 business days), and the bunching rule where a later due date overtakes the next one. These are the concessions most employers do not know they have. The new employee concession matters at onboarding: the first eligible contribution for a new employee, or the first contribution to a new fund after an existing employee changes funds, must be received within 20 business days of that payday rather than 7. It applies once, to the first contribution only. The second payday returns to the 7 day rule. | Situation | Due date | Applies to | | --- | --- | --- | | Standard payday | 7 business days after the QE day | Every eligible employee | | First contribution for a new employee | 20 business days after the QE day | That first contribution only | | First contribution to a new fund | 20 business days after the QE day | Existing employee who has changed funds | | Out of cycle payment | 7 business days after the next regular payday | Bonuses, commissions, back pay, advances | | Exceptional circumstance determination | Later of 20 business days after the QE day or after the determination | Classes of employers, self-assessed | | Bunching rule | The later of the two due dates | Where a 20 day due date overtakes the next payday | Out of cycle payments are the concession most often missed. A Christmas bonus paid on 7 December, where the next ordinary payday is 10 December, carries the same super due date as the 10 December pay run. The rule only applies where the payment sits outside a regular pay schedule; a contractor paid on invoice has an irregular payday, not an out of cycle one, and is covered by [the payday super regulations](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/payday-superannuation) and Legislative Instrument LI 2026/20. Exceptional circumstance determinations cover natural disasters and widespread IT or communications outages. You do not apply for one. The ATO makes a determination for a class of employers, announces it, and you self-assess whether it covers you and which paydays it covers. Keep the records that show it applied to you. ## How Is the New Super Guarantee Charge Calculated? The super guarantee charge is assessed per payday and has four components: the total individual final SG shortfalls, notional earnings compounding daily at the general interest charge rate, an administrative uplift starting at 60% of those two amounts, and any choice loading of 25% capped at $1,200 per notice period. Employers no longer lodge an SG statement. This is the structural change most employers have not absorbed. Under the old system you worked out your own shortfall and lodged a statement. Now [the ATO calculates the charge](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/missed-or-late-payday-super-payments/what-happens-if-you-dont-pay-super-correctly) from Single Touch Payroll and fund data and issues an assessment, and that assessment is due and payable on the day it is made. ### The four components | Component | How it is worked out | | --- | --- | | Individual final SG shortfall | 12% of qualifying earnings for the payday, less on time contributions, less late contributions received before the assessment | | Notional earnings | The base shortfall at the GIC daily rate, compounded daily from the day after the due date until the shortfall is cleared or the day before assessment | | Administrative uplift | Starts at 60% of final shortfall plus notional earnings, reduced by compliance history and voluntary disclosure | | Choice loading | 25% of contributions for a payday where the choice of fund rules were not followed, capped at $1,200 per notice period | The [general interest charge rate](https://www.ato.gov.au/tax-rates-and-codes/general-interest-charge-rates) for the October to December 2026 quarter is 11.51%, a daily rate of 0.03153425%. It was 11.43% for July to September 2026. Because notional earnings compound daily, the interest component on a small shortfall stays small; it is the uplift that makes an unfixed shortfall expensive. ### The administrative uplift is not a flat 60% Much of the commentary published before commencement described a fixed 60% penalty. That is wrong. The uplift starts at 60% and comes down two ways, and the two reductions stack to nil. If you have not received an ATO initiated super guarantee charge assessment in the two years to the payday, the uplift drops by 20 percentage points. Charges before 1 July 2026 are ignored for that test, as are assessments based on your own voluntary disclosure. Lodging a voluntary disclosure statement reduces it by up to a further 40 percentage points depending on speed. | Voluntary disclosure lodged | No ATO assessment in prior 2 years | Prior ATO assessment | | --- | --- | --- | | Within 30 days of the payday | 0% | 20% | | 31 to 60 days | 5% | 25% | | 61 to 120 days | 10% | 30% | | More than 120 days | 25% | 45% | | Not lodged before assessment | 40% | 60% | Source: ATO, What happens if you don't pay super correctly, last updated 21 June 2026. ### Worked example: the cost of noticing late A Melbourne hospitality operator pays 22 staff fortnightly. On one payday the contributions are sent on time, but three employees' contributions are rejected by the fund on a unique superannuation identifier mismatch. The base shortfall for those three is $950. The operator has had no ATO initiated super guarantee charge assessment since 1 July 2026. | Component | Fixed at day 30, disclosed day 31 to 60 | Not fixed, ATO assesses at day 120 | | --- | --- | --- | | Final SG shortfall | $0 | $950.00 | | Notional earnings | $9.03 | $36.63 | | Administrative uplift | $0.45 (5%) | $591.98 (60%) | | Super guarantee charge | $9.48 | $1,578.61 | The $950 was always owed. The difference between the two columns is $1,569, and all of it is the consequence of not reading an error message. Calculated at the GIC daily rate of 0.03153425% compounding, illustrative only. In the second column the operator also still owes the $950 to the fund through the charge, and if the assessment is not paid, general interest charge and [a late payment penalty](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/missed-or-late-payday-super-payments/what-happens-if-you-dont-pay-super-correctly/what-happens-if-you-dont-pay-the-super-guarantee-charge) follow, neither of which is deductible. One genuine improvement: the super guarantee charge for paydays from 1 July 2026 is deductible in full, across all four components. The old quarterly charge was not, and charges relating to pre 1 July 2026 quarters remain non deductible. This changes the arithmetic of catching up historical shortfalls, and it is worth modelling properly as part of [a tax planning review](https://42advisory.com.au/services/tax-planning-melbourne) rather than assuming the old treatment. ## What Should You Do If a Contribution Is Rejected or Late? Pay the outstanding amount to the employee's fund immediately, before the ATO issues an assessment. Late contributions reduce the shortfall and stop notional earnings accruing. Once an assessment is issued the money is payable to the ATO instead, and the administrative uplift is locked in at the higher rate. Under payday super, [error correction](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/missed-or-late-payday-super-payments/what-to-do-if-you-miss-a-payday-super-contribution) is a weekly payroll control rather than a quarterly clean up. Funds now have 3 business days to allocate or return a contribution, so a rejection surfaces quickly if someone is looking. The failure mode we see is nobody looking. ### The check to run after every pay run - Open the clearing house or payroll error log within 3 business days of every payday. The ATO accepts that if no error has been received, you can assume the contribution was received on time. - Check for the common rejections: wrong unique superannuation identifier or member number, ABN mismatch, stale fund details, an inactive electronic service address for a self managed fund, and contribution amount mismatches. - Correct the detail and resend the same day. The 7 business day clock does not pause for a rejection, so a resend on day 8 is already late. - Record what happened and how you fixed it. Under the ATO's first year approach, evidence of prompt correction is what keeps you out of a compliance review. - Update Single Touch Payroll if the underlying qualifying earnings figure was wrong, not just the payment. A voluntary disclosure statement is optional and replaces nothing. It is not the old SG statement, which no longer exists for paydays from 1 July 2026. Its only function is to reduce the administrative uplift, and the ATO's own advice is to pay the fund first and then decide whether disclosure is worth lodging. In the first year, if your conduct puts you in the low risk zone, the ATO says it will not apply compliance resources to you even if you do not disclose. Two situations need no correction at all. If an employee reaches the [maximum contribution base](https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/super-guarantee) of $270,830 for 2026-27, you can stop paying minimum super guarantee for them for that year while continuing to report the maximum contribution base amount at the year to date qualifying earnings label. And if you overpay, the excess is applied automatically to any existing unpaid super guarantee or carried forward for up to 12 months against future amounts. ## How Does the ATO's First Year Compliance Approach Work? PCG 2026/1 sets out how the ATO will direct compliance resources between 1 July 2026 and 30 June 2027, sorting employers who have already breached the rules into low, medium and high risk zones. It is a resourcing policy, not an exemption. The super guarantee charge is still imposed by law in every zone. This distinction matters and is widely misreported. [Practical Compliance Guideline 2026/1](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/missed-or-late-payday-super-payments/getting-it-right-compliance-in-the-first-year-of-payday-super), finalised on 28 January 2026, does not suspend the law, waive the charge or create a grace period. It tells you where the ATO will and will not spend its audit effort. A low risk employer still has a legal liability for any super guarantee charge that arises; the ATO is simply saying it does not expect to review those actions. The charge itself only disappears when the shortfall is cleared before an assessment is made. | Risk zone | Criteria | Stated ATO response | | --- | --- | --- | | Low | Attempted to pay in full and on time for the payday; some contributions were not received or could not be allocated; corrected as soon as reasonably practicable; no unpaid super remains for any employee for that payday | No further review of the employer's actions is expected | | Medium | Does not meet the low risk criteria, but all unpaid super guarantee was rectified within 28 days after the end of the quarter in which the qualifying earnings were paid | Compliance resources may be applied; lower priority than high risk cases | | High | Meets neither the low nor medium criteria, including where amounts remain outstanding beyond 28 days after the end of that quarter | Compliance resources are likely to be applied; highest priority for compliance action | Three points that the risk table alone does not convey. First, no risk assessment applies at all if your contributions are paid in full, on time and to the right fund; the zones only describe employers who have already breached the rules. Second, employers move between zones as behaviour changes over time, so a poor start can be recovered. Third, the guideline covers paydays from 1 July 2026 only. It does not apply to the quarterly system, including any unpaid super for the June 2026 quarter. Our view is that employers should treat the first year approach as breathing room to fix process, not as licence to defer. The guideline expires on 30 June 2027, and the behaviour it rewards, paying each payday and correcting fast, is the behaviour that keeps the charge at nil afterwards. ### Not sure your pay runs are clearing within 7 business days? We review the last three months of your super payments against fund receipt dates, identify unallocated contributions, and set the controls that keep you in the low risk zone. [Contact us](https://42advisory.com.au/contact-us) ## Does Payday Super Apply to Contractors and Directors? Yes. The 7 business day rule applies to everyone entitled to super guarantee, including independent contractors paid mainly for their labour, sportspeople and performers, and company directors. For a contractor engaged principally for labour, the QE day is the day their invoice is paid, not the day the work was done or the invoice issued. This is the change with the largest operational tail, because contractor payments typically sit in accounts payable rather than payroll. Nobody in the accounts payable queue is watching a 7 business day super clock. Under the old quarterly system a misclassified contractor produced a shortfall discovered months later; now it produces a dated shortfall on every invoice payment. The extended definition in section 12 of the Superannuation Guarantee (Administration) Act 1992 has not changed, but its consequences have sharpened. If you have not tested your subcontractor base against it, our guide to the [contractor versus employee distinction](https://42advisory.com.au/42-advisory-blog/contractor-vs-employee-ato) sets out the tests, and our note on [PSI rules for subcontractors](https://42advisory.com.au/42-advisory-blog/psi-rules-subcontractors-australia) covers the related income tax position. Payments to contractors caught by section 12 are qualifying earnings whether the work was done during ordinary hours or outside them. Two practical points. A contractor paid on invoice has an irregular payday, not an out of cycle payment, so the concession that pushes bonuses to the next regular payday does not apply; each invoice payment starts its own 7 business day clock. And businesses with heavy subcontractor volumes, particularly [builders and trades](https://42advisory.com.au/industries/builders-tradies-accountants-melbourne), should reconcile their super population against the contractors they already report in their [taxable payments annual report](https://42advisory.com.au/42-advisory-blog/tpar-who-needs-to-lodge-a-taxable-payments-report). The two populations are not identical, but a name in one and not the other is worth a look. ## Where Does Payday Super Hit Cash Flow? Payday super removed a working capital float that quarterly payers relied on. An employer paying fortnightly previously held each pay run's super for up to four months. From 1 July 2026 that money leaves the account within days, so the same wage bill now consumes roughly 12% more cash in the week it is paid. The effect was a one off step down in available cash, not an increase in the amount of super owed. It landed hardest on labour intensive businesses with thin working capital: hospitality, construction, aged care, allied health and agency staffing. For those businesses the right response is a forecast that models super at pay run frequency rather than quarterly, which is standard in any [three way forecast](https://42advisory.com.au/42-advisory-blog/3-way-forecasting-for-sme-growth) we build. Three months in, the businesses managing it best are doing one thing consistently: transferring the super amount to a separate account on payday, at the same time as the net wages run, rather than paying it from the operating balance later in the week. If your cash position makes that difficult, that is a working capital conversation rather than a payroll one, and it is worth having before a shortfall accrues. We cover it as part of [cash flow forecasting and advisory work](https://42advisory.com.au/services/business-advisory-forecasting). Medical and allied health practices have a particular version of this problem, because service entity arrangements and practitioner payment cycles often sit outside the main payroll. We deal with that pattern regularly in [practice accounting engagements](https://42advisory.com.au/industries/accounting-advisory-for-doctors-dentists-health-practices), and the payday super question is usually the same one: which payments are qualifying earnings, and who is watching the clock on them. ## The June 2026 Quarter: A Separate, Still Live Obligation The April to June 2026 quarter was the last under the old rules. It was calculated on ordinary time earnings paid between 1 April and 30 June 2026, and contributions had to be received by employees' funds by 28 July 2026. That obligation is historical, but it is not closed, and it is governed by the old law, not by anything in this guide's earlier sections. If you missed 28 July 2026, three consequences follow and none of them are softened by the payday super transition. You must lodge a super guarantee charge statement and pay the charge to the ATO for the June quarter. The late payment offset is not available for that quarter. And [the ATO's changeover guidance](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/payday-super-how-to-manage-super-during-the-changeover) confirms that the first year compliance approach in PCG 2026/1 does not apply to quarterly super at all. The allocation rule also caught people out. Contributions received by a fund on or before 28 July 2026 were applied first to the June quarter obligation, with any remainder carried forward to the first available QE day for up to 12 months. Contributions received on or after 29 July 2026 could not be applied to the June quarter at all; they only reduce payday super obligations from 1 July 2026 onward. If your July reconciliation has never been checked against that rule, it is worth doing now, because an employer can be simultaneously in credit under payday super and in default for the June quarter. That reconciliation sits naturally alongside your [BAS and IAS work](https://42advisory.com.au/services/bas-ias-accountant-services-melbourne), and the quarterly super dates that still matter for prior periods are set out in our [key ATO due dates guide](https://42advisory.com.au/42-advisory-blog/key-ato-due-dates-bas-payg-fbt-super-tpar). ## What Are the Fair Work Consequences of Unpaid Super? Since 1 January 2025, intentionally underpaying an amount payable for an employee's benefit, including superannuation, can be a criminal offence under the Fair Work Act 2009. Honest mistakes are excluded. Maximum fines reach the higher of three times the underpayment or $9.1 million for a company, and individuals face up to 10 years imprisonment. The word doing the work in that capsule is intentional. The [Fair Work Ombudsman's criminal prosecution guidance](https://www.fairwork.gov.au/about-us/compliance-and-enforcement/criminal-prosecution) is explicit that the offence, in sections 327A to 327C of the Fair Work Act 2009, does not capture honest mistakes. A rejected contribution you fixed in three days is not wage theft. A deliberate decision to stop paying super while continuing to pay wages is a different matter, and payday super makes that decision visible in ATO data within days rather than months. Two qualifications worth knowing. The criminal provisions do not apply to superannuation for certain state referred employees, broadly those employed by sole traders, partnerships and other unincorporated entities in New South Wales, South Australia, Queensland, Tasmania and Victoria, along with some state and local government employees. And a small business employer who has complied with the Voluntary Small Business Wage Compliance Code cannot be referred by the Ombudsman for criminal prosecution. Neither qualification affects the super guarantee charge, which applies regardless. ## Your Payday Super Operating Checklist This is the standing control set, not a pre commencement to do list. Run it as part of every pay cycle and review it each quarter. - **Pay on payday, not on day seven.** Know your clearing house's processing time and subtract it. If the New Payments Platform is available through your provider, use it. - **Assign the error log to a named person.** Checked within 3 business days of each payday, with a record of what was found and fixed. - **Collect fund details at onboarding, not at first pay.** Where an employee provides nothing, request stapled fund details from the ATO. Since 27 March 2026 you can request them and offer the stapled fund at the same time you provide the choice form. - **Map every pay code to qualifying earnings.** Commissions, task allowances, leave loading and partial expense allowances are where the misclassifications sit. - **Bring contractor payments into the super process.** Accounts payable needs the same 7 business day discipline as payroll for anyone caught by section 12. - **Confirm STP reports both new labels.** Year to date qualifying earnings and year to date super liability, each payday. Reporting without them will be rejected from 1 July 2027. - **Segregate the super cash on payday.** Move it out of the operating account with the net wages run. - **Track the maximum contribution base per employee.** $270,830 for 2026-27, capping super guarantee at $32,499.60 per employee for the year. - **Close out any pre July 2026 shortfalls.** Those attract the old, non deductible charge and sit outside PCG 2026/1. For most of our [small business clients](https://42advisory.com.au/services/small-business-accountant-melbourne) this sits inside the monthly bookkeeping cycle, with the super reconciliation run alongside the bank reconciliation. Where payroll is handled in house, the control that matters most is the second one: somebody named, checking the error log, every pay run. It also keeps your [compliance position](https://42advisory.com.au/services/small-business-tax-compliance-melbourne) defensible if the ATO does look. ## Key Takeaways | Point | What to do this week | | --- | --- | | Receipt by the fund is the test | Confirm your clearing house processing time in writing and set the payment day accordingly | | Unread error messages cause the losses | Name the person who checks the error log within 3 business days of each payday | | The uplift, not the interest, is the cost | Pay any shortfall to the fund before an assessment; consider a voluntary disclosure within 30 days | | Contractors start their own clock | Test your subcontractor base against the section 12 definition and bring it into the super process | | PCG 2026/1 is not an exemption | Use the year to 30 June 2027 to fix process, and document every correction as you go | ### Book a payday super and payroll review A CPA reviews your pay codes against qualifying earnings, tests your contractor population, checks fund receipt timing, and gives you a written control set for your payroll team. [Schedule a meeting](https://42advisory.com.au/meetings/42advisory/initial-meeting-online) **Disclaimer:** The information provided in this article is general in nature and does not constitute specific tax, legal, or financial advice. Rates, thresholds and dates stated apply to the 2026-27 income year unless otherwise noted. We recommend seeking professional advice tailored to your individual circumstances. 42 Advisory is a CPA firm and Registered Tax Agent. ## Frequently Asked Questions ### Has payday super legislation been passed? Yes. The Treasury Laws Amendment (Payday Superannuation) Act 2025 (Act No. 57 of 2025) received Royal Assent on 6 November 2025, alongside the Superannuation Guarantee Charge Amendment Act 2025. The Treasury Laws Amendment (Payday Superannuation) Regulations 2026 followed. The rules have applied to paydays from 1 July 2026. ### How many days does payday super have to be paid? Seven business days from payday to receipt by the employee's super fund, with payday counted as day 0. A business day excludes weekends and any day that is a public holiday across a whole state or territory. A first contribution for a new employee, or a first contribution to a new fund, has 20 business days. ### Is there a grace period for paying payday super contributions? No. PCG 2026/1 is often described as a grace period, but it does not change the law. The 7 business day deadline applies from 1 July 2026 and the super guarantee charge arises automatically when a contribution is late. The guideline only tells employers where the ATO will direct compliance resources in the year to 30 June 2027. ### Who is exempt from payday super? No employer is exempt. There is no small business carve out, no industry exemption and no phase in. The rules apply to companies, trusts, sole traders, partnerships and not for profits. Employee eligibility for super guarantee itself did not change, so workers who were never entitled to super remain outside the system. ### What are qualifying earnings for payday super? Qualifying earnings are all ordinary time earnings, all commissions whenever earned, salary sacrificed super amounts, and specified payments to workers caught by the extended employee definition, including contractors paid mainly for their labour. Overtime is excluded where ordinary hours are clearly identified in an award or agreement. ### What happens if an employer does not pay super on time? The ATO assesses a super guarantee charge for that payday, made up of the final shortfall, notional earnings compounding daily at the GIC rate, an administrative uplift starting at 60%, and any choice loading. The charge is payable to the ATO on the day the assessment is made, and employers no longer lodge a super guarantee statement. ### Is the super guarantee charge tax deductible now? Yes, for QE days from 1 July 2026, and across all four components. It is not deductible for quarterly periods before 1 July 2026. General interest charge accruing on an unpaid super guarantee charge and the late payment penalty are both non deductible, and the late payment penalty cannot be remitted. ### What is the late payment penalty under payday super? If a super guarantee charge assessment is unpaid 28 days after it is made, the ATO issues a Notice to Pay. If the amount in that notice is still unpaid 28 days later, a penalty of 25% of the outstanding charge applies, rising to 50% where the same penalty applied in the previous 24 months, and falling to 0% under an exceptional circumstance determination. ### What replaced the Small Business Superannuation Clearing House? Nothing directly. The SBSCH closed to new users on 1 October 2025 and shut permanently on 1 July 2026. Employers now use a commercial clearing house, their payroll software's super function, a super fund payment portal, or direct SuperStream compliant payments. Compare processing times, since the 7 business day deadline is unaffected by them. ### How do salary sacrifice arrangements work under payday super? Salary sacrificed super amounts are qualifying earnings, so the minimum super guarantee is still calculated on them and an employer cannot use sacrificed amounts to reduce its own obligation. Because contributions now reach funds each payday, employees close to the $32,500 concessional cap for 2026-27 should review their arrangement timing. ### Does payday super require Single Touch Payroll reporting changes? Yes. From 1 July 2026 employers report year to date qualifying earnings and year to date super liability for each employee with every pay run. If your software cannot yet report both, start as soon as it can; from 1 July 2027 reporting that omits them will be rejected and penalties may apply. ### What happens if an employer pays too much super? Excess amounts above the minimum super guarantee are applied automatically to any existing unpaid super guarantee, then carried forward for up to 12 months to offset future amounts. No action is usually needed. If the employee has left, the employer must contact the fund directly to request a refund of the overpayment. ## Get ready for the payday transition [Book a meeting](https://42advisory.com.au/meetings/42advisory/initial-meeting-online) ![](https://42advisory.com.au/hubfs/sergiy-kucherenko-cpa-director-42-advisory.jpg) [mailto:skucherenko@42advisory.com.au](mailto:skucherenko@42advisory.com.au) ##### Sergiy Kucherenko Sergiy Kucherenko is the founder and director of 42 Advisory and a member of CPA Australia. He has spent his career in public practice, working with business owners on tax, structuring and the practical problems that come with running a growing company. Before accounting, Sergiy trained as an engineer and studied computer science. The habit of building systems stuck. It is why the practice runs cloud-first and heavily automated, with Xero at the centre rather than paper files, and why he is comfortable acting for clients whose businesses are technical, software companies in particular. His client work covers medical technology, telecommunications, SaaS, construction and trades, and healthcare, including general practice and dental groups. Some clients come to him at incorporation; others when they are restructuring, acquiring or preparing to sell. The areas he knows best are service trust arrangements for medical practices, revenue recognition for SaaS businesses, and cash flow management in construction. 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