Businesses will face overlapping super obligations in July, ATO confirms

The ATO has affirmed this and reminded businesses that any super payments made in July would first be applied to any outstanding super balances from the June quarter, possibly leading to payday super shortfalls.

“Super for pay runs in July may be due before your final quarterly super payment is due on 28 July,” the ATO said on its website. 

“Contributions received on or before 28 July will reduce any super owing for the June quarter first. If there is any remainder, contributions will then be used under Payday Super. If you pay on time for quarterly and Payday Super you don’t risk incurring penalties.”

The ATO urged businesses to review their expected pay cycles for July to understand the impact of Payday Super on their cash flow. If possible, it encouraged firms to pay their June-quarter super before their first July payday to ensure a more seamless changeover.

It also encouraged businesses to review their super payment processes to ensure they could make the 7-day turnaround required under payday super.

“When Payday Super starts, your payments must be received (and have enough information to be allocated) by super funds within 7 business days after payday to avoid the super guarantee charge (SGC),” the Tax Office said. 

“This timeframe needs to take into account the time it takes for processing and for errors to be rectified.”

To prepare for this quick turnaround, the ATO said businesses should speak with their payroll provider, clearing house and employees’ super funds to understand how long their clearing house took to process payments, whether payments were processed via the instantaneous New Payments Platform, where they could find error messages, and estimated turnaround times for rejected payments.

It also reminded small firms that the Small Business Superannuation Clearing House would permanently close from 1 July 2026 and urged affected businesses to make alternative arrangements.