If you employ staff and pay their super quarterly, your world is about to change and 1 July 2026 is closer than it looks.
From 1 July 2026, every Australian employer must pay super at the same time as wages. Super contributions must also reach the employee’s fund within seven business days of payday. That’s a major shift from the current system, where you have up to 28 days after the end of each quarter.
Here’s everything you need to understand the steps you need to take before year end to help you prepare for Payday Super.
What is Payday Super?
Payday Super is a government reform designed to reduce unpaid superannuation across Australia. Under the current rules, employers pay super at least quarterly which means gaps can go undetected for months, and some employees never receive contributions they’re owed. Payday Super fixes this by linking super directly to each pay run.
The 7-Day Rule: What It Means in Practice
From 1 July 2026, the super must reach your employee’s fund within 7 business days of payday. This isn’t 7 days from when you submit the payment. It’s 7 days from when wages hit their superannuation account meaning you need to be make payment earlier.
To put it plainly: if you pay your team on a Friday, the super typically needs to arrive at their fund by the following Tuesday (accounting for weekends and public holidays).
For new employees or fund changes, you’ll generally have up to 20 business days for that first payment, but after that, the 7-day rule applies.
What’s Changing in the Calculation
The way you calculate super is also changing. Under the current rules, super is based on Ordinary Time Earnings (OTE). From 1 July 2026, it will be based on qualifying earnings which is a broader definition that includes OTE plus commissions, bonuses, and salary sacrifice contributions.
This means some employees may attract slightly higher super contributions than before. If you’re unsure how this affects your payroll setup, this is exactly the kind of thing worth working through with us before the deadline.
The SBSCH Is Closing. Act Now If You Use It
If your business currently uses the Small Business Superannuation Clearing House (SBSCH) to pay super, you need to move to an alternative before 30 June 2026. The SBSCH was built for quarterly payments and simply isn’t suited to the faster, per-pay-run cycle that Payday Super requires. The ATO closes permanently on 1 July 2026.
After 30 June, you won’t be able to access or download your SBSCH records, so make sure you retrieve any historical records you need before then.
The good news: if your business uses Xero, you already have access to Auto Super which Xero’s built-in super payment system included in your plan at no extra cost. Most major accounting ledger programs will have a similar system, however if they don’t you need to make changes not to avoid getting caught later.
What About Xero? Is It Ready?
For the vast majority of small businesses using Xero, the short answer is yes, provided your file is set up correctly.
Xero is SuperStream certified and is actively updating its platform to support Payday Super requirements. Auto Super handles calculations and payments directly within your payroll workflow, and Xero integrates with SuperChoice to manage electronic transfers and data submissions.
However, Xero can only do its job if your payroll setup is correct. Before 1 July, you should check:
- Auto Super is registered in your Xero account, it doesn’t activate automatically
- Your bank account is connected and verified as the nominated payroll account
- Authorised payment approvers are set up correctly
- Pay items are configured to reflect qualifying earnings (not just OTE)
- Employee fund details are accurate, errors will now be rejected faster and cause delays
If you’re not sure your Xero setup is ready, reach out to us and we can work through it with you.
The Cash Flow Impact Nobody Is Talking About
Moving from quarterly super payments to per-pay-run super will have a real short-term impact on your cash flow. Instead of setting aside super in one hit every three months, it becomes a line item in every single pay run.
For businesses that have been treating quarterly super as a buffer and holding out on payment until the quarterly due date will need to plan ahead as July is quickly approaching. This will require business owners to rethink of how you manage working capital. It’s not something to leave to the last minute.
If you’d like to map out the cash flow impact specific to your business before July, we’re happy to help with that planning.
What You Need to Do Before 1 July 2026
Here’s a practical checklist:
- If you use the SBSCH: start transitioning to Xero Auto Super now or equivalent product. Don’t wait until June.
- If you use Xero: confirm Auto Super is registered and your setup is correct.
- Review your payroll configuration: make sure pay items will calculate qualifying earnings correctly from 1 July.
- Retrieve any SBSCH records NOW: your accountant may lose access to this data shortly after the due date.
- Plan your cash flow: model what paying super every pay run looks like for your business.
- Talk to us: if any of the above feels uncertain, this is a great time to book a review.
The deadline is firm and the penalties for late payments can be catastrophic. Penalties are costly and can be as high as 60% uplift plus interest and other charges. Another change is that the super guarantee charge will apply per pay run rather than quarterly, meaning if you pay wages weekly, you may now have 13 separate super guarantee charges for each quarter.
Don’t leave this one to the last minute. Feel free to contact us if you have any questions regarding the above.
This article contains general information only and does not constitute financial or legal advice. Every business’s situation is different, please reach out to Spot On Business Advisory for guidance specific to your circumstances.
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