Early prep on Payday Super the ‘best way to avoid penalties, payroll headaches’

“On the surface it’s a simple change, but it brings a number of technical adjustments that employers need to understand,” he said.

Under the legislation, a move to a new earnings definition known as qualifying earnings will include ordinary time earnings and amounts such as salary-sacrificed super.

Further, Payday Super will move the quarterly cap on earnings subject to super to an annual threshold projected to be set at about $25,000 for the 2027 financial year.

On 30 June 2026, the federal government will close its Small Business Superannuation Clearing House. HLB Mann Judd said employers who have relied on the free services would be forced to join a commercial clearing house just before the Payday Super laws take effect.

Although the ATO indicated that in the first year of rollout, it would support employers who make genuine efforts, it would also still apply a superannuation guarantee charge on late payments, which will accrue interest daily from the original due date.

After Payday Super is affected, the ATO will be able to identify and act on late payments more quickly, using real-time data matching between payroll and super funds.

Bembrick said acting now would allow employers to avoid unnecessary penalties and reduce risk.

“Early preparation is the best way to avoid penalties and payroll headaches,” he said.

“From confirming a new employee’s super fund details before their first payment, to setting up processes to quickly fix a rejected contribution, the detail matters."

Based on Treasury estimates, billions of dollars in superannuation go unpaid or are paid late every year, directly impacting employees' retirement savings.