From July 1, 2026, the ‘Payday Super’ system will be officially implemented in Australia. This system mandates employers to pay superannuation on the same day they pay their employees’ wages.
What changes for employees?
Previously, employers could pay superannuation quarterly (every 90 days), but now they must pay it simultaneously with each pay cycle (weekly, fortnightly, etc.)
According to Treasury estimates, as a result of this change:
A 25-year-old worker earning median income could receive approximately $6,000 (about 1.5%) more in superannuation at retirement
Reduced risk of unpaid or delayed superannuation
Impact on business owners and small businesses
The biggest change is increased cash flow burden
Until now, many businesses paid superannuation quarterly and used it as operating capital, but now they must pay superannuation immediately with each payroll
Particularly for small businesses, there are concerns about short-term financial burden and credit constraints
ATO’s position
This system is “a once-in-a-generation reform”
Non-payment of superannuation can be identified much faster
Elimination of quarterly payments reduces the possibility of large-scale arrears
ATO plans to support businesses in adapting before imposing penalties
Approximately 40% of businesses already pay superannuation more frequently than quarterly
What business owners need to prepare now
Review systems to align superannuation payment cycles with payroll cycles
Re-evaluate payroll and superannuation automation software
Review short-term cash management plans and credit limits
Utilize pre-implementation checklists provided by ATO
Payday Super offers employees a ‘clear benefit’ of increased retirement assets, while requiring business owners to completely revise their cash flow management strategies.
