Your guide to Payday Super: staying compliant and avoiding common pitfalls

Jacobson noted that employers will face added pressure to manage their cash flow as the June 2026 quarter obligations coincide with PDS obligations for qualifying earnings days (QE) in July. She said that while employers can opt to move to less frequent payroll cycles, eligibility is subject to the payroll requirements of awards or agreements.

“Monthly payroll is typically not popular with employees and may increase the chance of overpayments where an employee leaves,” Jacobson noted.

For 2026/27, the ATO has directed increased scrutiny to what it deems higher-risk employers, “who are not adjusting to more frequent payments or who are not paying super at all,” Jacobson said.

“High-risk employers need to understand that if the ATO receives definitive information that an employer has an SG shortfall for a QE day, it is required to apply the law, even if the employer falls within the low risk green zone under PCG 2026/1,” she added.

“Employers will also be exposed if an employee has an SMSF and is late lodging its annual return – the ’regulation details withheld‘ status on Super Fund LookUp will reject the contribution, leaving the employer with even less time to make an on-time payment to another fund.”

Avoiding SGC, penalties

To remain compliant with PDS and to not attract a superannuation guarantee charge (SGC), employers must make their payment of superannuation to employees within the “usual period”, which is within seven days of the QE day, or 20 days if there are extenuating circumstances such as if the payment is for a new employee, one who is changing superfunds, natural disaster, widespread technology failure across multiple firms.

“The super guarantee charge is the total of any unpaid super guarantee, notional interest and administrative costs. It includes an additional amount if you haven't followed the choice of fund rules,” the ATO's website reads.

PDS requires employers to ensure that employees receive their superannuation contribution within seven business days of QE day, or have the payment deemed within the “late period”.

While payments within the “late period” will still incur interest in the form of a notional earnings component, Jacobson said it would still reduce the final SG shortfall.

“Where an on-time payment has been missed, employers should make a late payment wherever possible,” Jacobson said.

She also said that the previously available late payment offset will no longer be available from today.

Jacobson urged that employers lodge a voluntary disclosure statement as soon as they become aware of missed PDS contributions. In contrast to the previous SG statement, which was mandatory and automatically triggered an SGC assessment, Jacobson emphasised that a VDS will not trigger an ATO assessment but will instead notify the ATO of a shortfall.

She stressed that employers who pay within the “late period” and lodge a VDS could reduce the 60 per cent administrative uplift amount penalty (AUA) within the SGC by up to 40 percentage points.

Jacobson noted that the “late period” could last weeks, months, or even years, depending on when the ATO decides to assess the employer.

With the closure of the Small Business Superannuation Clearing House (SBSCH) last night (30 June) at 11:59pm, Jacobson said that employers will now need to ensure that superannuation contributions are received by the employee’s super fund within seven business days of the QE as opposed to by the clearing house.

The closure of the clearing house places the responsibility for alternative arrangements on employers, including adopting PDS-compliant payroll software, sourcing a third-party commercial clearing house, or paying a registered tax practitioner, which Jacobson noted will be an additional financial burden for small businesses.

While the ATO will not provide notification to employers when the contribution has been successfully lodged, a member verification request can be made prior to payment to ensure that the reported data is correct for new employees and to confirm whether there has been a change in the super fund.

The Super Members Council has urged employers to take immediate, practical steps to prepare their systems.

“While the ATO will not provide notification to employers when the contribution has been successfully lodged, a member verification request can be made prior to payment to ensure that reported data is correct for new employees and whether there is a change in super fund,” the ATO said.