On 9 October 2025, the Australian Government introduced the Treasury Laws Amendment (Payday Superannuation) Bill 2025) and Superannuation Guarantee Charge Amendment Bill 2025.
If the legislation is passed, from 1 July 2026, employers will need to ensure that superannuation guarantee (SG) contributions reach their employees superannuation funds within seven business days of each pay day . This replaces the current requirement to pay SG within 28 days after the end of each quarter .
The Australian Taxation Office (ATO) also released a draft practical compliance guide, PCG 2025/D5, outlining how it intends to apply compliance resources during the first year of operation.
While the reforms aim to strengthen SG compliance, they present significant challenges for multinational companies, particularly those with globally mobile employees and foreign payroll arrangements. No specific concessions have been announced for these groups.
This alert outlines the key changes and offers insights into compliance strategies.
The Payday Super reforms are summarised below.
Changes to SG calculation and payment
| Area | Current rules | From 1 July 2026 |
| Earnings base on which SG is calculated | Ordinary time earnings (OTE) | Qualifying earnings (QE) – includes OTE, salary sacrifice and related amounts |
| SG timing | Contributions to reach employeeʼs super fund within 28 days of the end of each quarter | Contributions to reach employeeʼs super fund within 7 business days of payment of QE1 |
| Maximum contributions base (MCB) – currently AUD 30,000 | Applied quarterly | Applied annually |
| SG exemption for specific employees2 | Limited to employees with 2 or more employers, where SG contribution is expected to exceed the concessional contributions cap
(CCC) | Available to any employee where SG contribution is expected to exceed the MCB. Reduces the risk of employees exceeding the Concessional Contributions Cap in circumstances such as a change in employer |
| Fund allocation | Funds must allocate or return payments within 20 business days | Funds must allocate or return payments within 3 business days |
| STP reporting | SG liability and/or OTE reported each pay day | QE and SG liability reported each pay day |
Changes to SGC and penalty framework
| Area | Current rules | From 1 July 2026 |
| Shortfall basis | SG shortfall based on salary and wages (rather than OTE earnings base) | Individual final SG shortfall calculated on the QE base. Late contributions paid before assessment reduce the shortfall |
| Interest / notional earnings | A fixed interest component on shortfall (nominal interest) at a rate of 10% per annum | Notional earnings on the shortfall: a daily interest component (based on the General Interest Charge (GIC) |
| Administrative uplift | Administration fee of $20 per employee per quarter for SGC | Administrative uplift component (additional charge) of up to 60% of the shortfall component to reflect enforcement cost and incentivise voluntary disclosure |
| Choice of fund non-compliance | Choice loading may apply when employer fails to comply with choice-of-fund rules | Choice loading component remains, with adjustments (eg, increased cap) under the new regime |
| Late payment penalty and GIC | GIC accrues on shortfall; traditional late payment penalties may apply | GIC will accrue on the entire SGC liability (shortfall + notional earnings + uplift) rather than just the shortfall component. If SGC remains unpaid 28 days after a Notice to Pay, a late payment penalty may apply (e.g. up to 50% of unpaid SGC) |
| Tax deductibility | SGC not tax-deductible | SGC (core amount: shortfall + notional earnings + uplift) will be tax deductible. Late payment penalties and interest after assessment will not be deductible |
The ATO recognises that employers, supporting systems and payroll service providers will face significant system and process changes to meet Payday Super obligations. It intends to take a
risk-based approach to ensure compliance resources are directed towards employers considered to be at a high risk of non-compliance.
| Risk rating | Description | Likely ATO action |
| Low | The employer made genuine efforts to pay all SG on time. Contributions delayed due to fund processing | ATO unlikely to review if reasonable steps were taken |
| Medium | SG paid in line with current quarterly rules (within 28 days after quarter end) but not yet aligned with Payday Super timing) | May be reviewed, but lower priority |
| High | SG shortfalls remain 28 days after quarter end | High likelihood of ATO review and penalties |
With the increased payment frequency and stronger compliance focus, employers should start preparing immediately. Key steps include:
No transitional relief has been announced for employees paid from foreign payrolls. This is at odds with the current STP reporting approach for this group of employees, which allows an extension to report.
Vialto Partners will continue to raise this issue with the ATO and will provide updates when further guidance is available.
Although the legislation has not yet passed, employers should treat 1 July 2026 as a firm start date. Preparing early will reduce the risk of SG shortfalls and potential penalties.
Our team of global mobility and employment tax professionals can assist you in navigating these changes and ensuring compliance with Australian superannuation laws. Contact us today for an initial consultation.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Emma Wappet
Partner
Kristy Whitnell
Director
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