iscoverAs conversations and debate circulate around the start date of Payday Super, the Coalition is proposing delaying its implementation date by 18 months for small businesses with less than 20 employees.
Coalition pushes back on Payday Super timeline to ‘make sure it succeeds’
03 November 2025
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8 minute read
The overall attitude towards Payday Super has been increasingly positive, yet concerns around the commencement date and implementation for small businesses have begun to surface.
Last week, Accountants Daily reported on these concerns from various accounting, super and tax professionals, with the overarching message that the implementation date of 1 July 2026 “lacked realism” and would be “overwhelming”.
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Based on this feedback and opinion, the Coalition also weighed in on the conversation with a proposal to defer Payday Super implementation by 18 months for small businesses with fewer than 20 employees.
The Coalition linked this proposal to the fact that it would be a “pragmatic” and “fair adjustment” to a complex reform.
Tony Greco, Institute of Public Accountants senior tax advisor, said the professional accounting body welcomed these proposals as it recognised the practical realities of running small enterprises amid rising compliance costs and system change fatigue.
“We support the intent of Payday Super to improve retirement outcomes for Australian workers. However, the one-size-fits-all start date of 1 July 2026 risks overwhelming small employers who are already grappling with system upgrades, cashflow pressures and resource constraints,” Greco said.
“The Coalition’s proposal for businesses with fewer than 20 employees to have more time is a sensible step.”
Pat Conaghan, shadow minister for financial services, said this push from the Coalition came after Labor delayed legislating Payday Super for three years, which had now left an “unreasonable timeline” of eight months for small businesses to comply.
According to Conaghan, the change would force employers to overhaul payroll systems, software and cash flow processes.
Conaghan also made the point that when the proposal was first introduced in 2022, Treasury’s analysis originally assumed an 18-month transition, rather than the now eight-month possibility.
Small businesses with fewer than 20 employees should have a start date of 1 January 2028 to comply, Conaghan said.
“This approach would give small businesses time to prepare and follows the same common-sense path we used to implement Single Touch Payroll. It would give 97 per cent of businesses extra time to prepare – while delaying Payday Super for only 28 per cent of employees,” he said.
“That’s a fair, balanced and responsible outcome. The goal here isn’t to stop Payday Super. It’s to make sure it succeeds. Workers deserve to be paid their super, and small businesses deserve a fair chance to get it right.”
Greco echoed a similar sentiment and said the reality of the situation was that paying superannuation was far more complex than paying wages.
“Smaller employers must navigate the frequency of paying employees, software changes, cashflow planning, and new clearing house arrangements – none of which can be implemented overnight,” he said.
“Small business owners are not opposed to reform – they simply need enough time and support to do it right. Without an appropriate transition period, there’s a real risk of errors, penalties and system failures that could undermine the intent of Payday Super.”
Based on this, IPA revealed it was urging the government to work collaboratively across the political spectrum to design a realistic implementation pathway that ensured compliance success rather than punitive outcomes.
“As the Coalition noted, the government has ignored advice from the Treasury, which suggests Digital Service Providers require 18 months from commencement of the legislation changes to prepare for implementation.”
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