ATO releases draft rulings on Payday Super

The ATO said qualifying earnings are an important concept in the payday super framework, as they are the single earnings base for working out an individual’s SG amount. A person’s qualifying earnings include amounts included in the person’s ordinary time earnings (OTE).

The guide provides a detailed definition of ordinary time earnings (OTE) and the types of payments it includes, such as earnings in respect of ordinary hours of work, commissions, allowances and loadings, bonuses, paid leave and holiday pay, long-service leave, workers’ compensation payments and directors’ fees.

The second guide, LCR 2026/D2 Payday Super: eligible contributions, sets out the criteria for contributions to be considered eligible, including the time frames within which super funds must receive them.

LCR 2026/D3 Payday Super: calculation and assessment of the superannuation guarantee charge explains how the new SGC will be calculated and assessed under the payday super framework.

The fourth guide, LCR 2026/D4 Payday super: application and transitional provisions, provides details on how the new laws will apply from 1 July 2026 and the transitional provisions that apply under the law.

The ATO said LCR 2026/D4 provides guidance on the application provisions of the Payday Super amendments and the savings provisions of the old act.

“The ruling also provides guidance on the provisions that support the transition from the quarterly SG system to Payday Super,” the Tax Office said.

“These transitional rules are intended to address timing mismatches, legacy arrangements and overlapping actions or obligations that may arise during the transition period."

Tax professionals and other stakeholders have until 1 May to provide their feedback on each of the four rulings.

Last month, ATO deputy commissioner Emma Rosenzweig said the move to Payday Super will help ensure employees receive their super entitlements on time and urged employers to start preparing for the changes.

Rosenzweig recommended that employers verify that their software can report both qualifying earnings and total super liability under Single Touch Payroll.

“Digital software providers are working on upgrading their systems behind the scenes, so it’s ready by 1 July 2026,” she said.

Businesses should also check that payroll records are up to date, including their employees’ super fund details, she added.

“Keeping accurate records now will save time down the track. I encourage [tax professionals] to check our website. You’ll find detailed information, including our approach to compliance, as well as a range of fact sheets that you can share with your employer clients,” she said.