If you own a business in Australia, you’ve probably heard about the upcoming changes to handling superannuation payments.
From 1 July 2026, Payday Superannuation will require employers to pay superannuation contributions at the same time as wages. This reform is designed to ensure workers receive their super on time and to help prevent unpaid entitlements.
Currently, businesses have the flexibility to pay super quarterly, but this system has led to significant gaps in payments. According to the Australian Taxation Office (ATO), in 2019-20 alone, $3.4 billion in super went unpaid. Payday Super is a major step toward eliminating that issue and ensuring employees’ super is accounted for.
Why Payday Super matters for employers
For business owners, this change means adapting payroll systems and cash flow management to accommodate more frequent super payments. While it might seem like a challenge at first, there are real benefits:
- No more quarterly super payment backlogs – Instead of managing a large lump-sum payment every few months, super will be a smaller, ongoing expense, making budgeting easier.
- Better payroll efficiency – Paying super alongside wages simplifies bookkeeping and reduces the risk of missed payments.
- Improved trust with employees – Workers can see their super being deposited in real-time, giving them peace of mind that their entitlements are secure.
How Payday Super will affect cash flow
Switching from quarterly to payday-based super contributions means businesses will need to take a closer look at cash flow.
Here’s what to expect:
1. More frequent super payments
Under the current system, employers can hold onto super funds for up to three months before paying them. With Payday Super, contributions must be processed every time wages are paid (weekly, fortnightly, or monthly). This means businesses will need to ensure they always have enough funds available.
2. Stronger budgeting and forecasting needs
With super payments happening more frequently, cash flow planning becomes more important than ever. Regularly reviewing financials, tracking expenses, and forecasting income will be essential to ensure smooth operations.
3. New super payment processes
The Small Business Superannuation Clearing House (SBSCH) will be decommissioned as part of these changes. Businesses will need to find alternative ways to process super contributions, such as payroll software that automates payments. Many solutions, like Payroller, offer built-in super payment processing to simplify compliance.
Understand the updated Super Guarantee Charge (SGC)
If an employer fails to make super payments on time, they will be subject to penalties under the updated Super Guarantee Charge (SGC), which includes:
- Outstanding super shortfall – any unpaid contributions based on Ordinary Time Earnings (OTE).
- Notional earnings – interest charged on unpaid amounts.
- Administrative uplift – extra charges applied for repeated late payments.
The longer an employer delays payments, the higher the financial consequences. To avoid penalties, businesses should have systems for automating and tracking super contributions.
Cash flow management tips for Payday Super
To make the transition smooth, businesses should take these steps ahead of time:
1. Upgrade your payroll system for automated super payments
If you haven’t already, now is the time to invest in payroll software that supports automated super payments. This will help ensure that super is processed on time, every time, and keep you compliant with the new laws.
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2. Set aside funds for super payments in advance
To prepare for Payday Super, start proactively setting aside funds. This approach ensures that cash flow disruptions are minimized when super contributions are due. Build a dedicated reserve by allocating a percentage of revenue specifically for superannuation payments. This can help avoid last-minute financial strain and ensure compliance with payment deadlines.
Periodically review your financial position to ensure you have enough funds for both payroll and super obligations, especially as the frequency of payment increases.
3. Renegotiate payment terms with suppliers
Managing outgoing cash flow can give you more breathing room for more frequent superannuation payments. Request longer payment terms from suppliers to delay outgoing cash without incurring penalties. This can give you more flexibility to manage super payments alongside other expenses.
Before Payday Super starts, establish strong relationships with your suppliers to get more favourable terms. If possible, consolidate your payments into fewer transactions to reduce administrative costs.
Long-term benefits of Payday Super
Despite the initial adjustment, Payday Super will have positive long-term effects for businesses:
✅ Easier cash flow management – No more large, unexpected quarterly payments disrupting finances.
✅ Better compliance – Paying super with wages means no more stress about meeting deadlines or penalties.
✅ Happier employees – Workers can track their super contributions in real-time, increasing transparency and trust.
✅ Simplified payroll processes – With super being handled alongside wages, bookkeeping and payroll management become more streamlined.
Get super ready with Payroller
Making the shift to Payday Super doesn’t have to be overwhelming. Payroller makes it easy for small businesses to automate super payments, ensuring compliance and saving time.
Get ahead of the changes today and make Payday Super stress-free!
For more details and expert guidance, visit Payroller’s Payday Super Guide.
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