Quick Summary
Quick Summary
- From 1 July 2026, super must be paid on the same day as wages — no more batching or quarterly lumping.
- The 12% super guarantee rate does not change; Payday Super is about timing, not cost.
- You must audit your payroll system, test a pay run, and update banking/super fund arrangements before 30 June 2026.
- Non-compliance triggers ATO fines (up to 200% of unpaid super), Fair Work claims, and reputational damage.
- OTE (Ordinary Time Earnings) includes salary, allowances, and regular bonuses — but excludes overtime and discretionary bonuses.
From 1 July 2026, the rules around when you pay superannuation to your employees change significantly. You’ll no longer be able to batch up super contributions monthly or quarterly — you must pay super on the same day you pay wages. This is called “Payday Super,” and it’s a material shift in how you manage payroll.
If you don’t get this right, you face underpayment fines, ATO compliance action, and potential unfair dismissal claims from employees. This guide walks you through exactly what’s changing, when you need to act, and what your payroll system needs to do.
What’s Changing on 1 July 2026?
Current rule (until 30 June 2026): You can pay super contributions quarterly or monthly, as long as it’s within a defined period. Many employers batch payments.
New rule (from 1 July 2026): Super must be paid on the same day (or within one business day) as you pay ordinary wages to the employee. No more batching. No more quarterly lumps.
This aligns superannuation payment with the employer’s payment cycle — daily, weekly, fortnightly, or monthly, depending on your pay frequency.
The 12% Super Guarantee Rate Stays the Same
Don’t confuse Payday Super with a rate increase. The super guarantee contribution rate remains at 12% of ordinary time earnings (OTE). There’s no jump to 12.5% from July 2026 — that legislative proposal did not proceed.
What does change:
- Timing: Same day as wage payment
- Clarity: No ambiguity about when payment is “due”
- Compliance: Non-compliance is immediately visible in payroll records
Who Must Pay Super on Payday?
You must pay super contributions for employees who are:
- Aged 18 or over, AND
- Earn $11,800 or more per financial year (this threshold is indexed annually)
Exceptions (no super obligation):
- Employees under 18 (optional — many employers pay it anyway)
- Employees earning under $11,800 per year
- Contractors and labour-hire workers (their responsibility, not yours)
What Counts as “Ordinary Time Earnings” (OTE)?
OTE is the foundation for calculating the 12% contribution. It includes:
- Regular wages and salaries
- Shift loadings and penalties
- Award rates and agreement rates
- Bonuses that are regularly paid
OTE excludes:
- Overtime payments
- Allowances (travel, clothing, meal allowances)
- Redundancy and termination payments
- Discretionary bonuses or irregular payments
Get this wrong and you’ll underpay super. For example, if an employee earns $60,000 annual salary, you calculate 12% on the full $60,000 (not on wages minus allowances).
📅 Important Deadline: 1 July 2026
Payday Super rules commence today. Ensure your payroll system can pay super on the same day as wages. Test now if you haven’t already.
Key Takeaways
Key Takeaways for Employers
- ✓Audit your payroll system now to confirm it supports same-day wage and super payment.
- ✓Correctly calculate OTE (12% of gross salary + regular allowances, NOT overtime or discretionary bonuses).
- ✓Test at least one pay run before 1 July 2026 to catch system errors early.
- ✓Update your banking and super fund arrangements to enable simultaneous payment.
- ✓Brief your bookkeeper or payroll provider, and consider a simple employee email explaining the change.
- ✓Non-compliance risks ATO penalties up to 200%, Fair Work underpayment claims, and employee departures.
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Key Compliance Dates
1 July 2026: Payday Super rules commence. All wage payments from this date must include same-day super payment.
Key actions by 30 June 2026:
- Audit your payroll system to ensure it can pay super on payday
- Update banking and super fund arrangements
- Brief your bookkeeper or payroll provider
- Test at least one pay run before 1 July
30 June 2026 (final date of old rules): Last opportunity to pay super under the old batching arrangement for that pay period.
Step-by-Step: What You Need to Do Now
1. Review your current super arrangement. Check which super fund you nominate for employees. If you’ve never elected a default fund, Fair Work Act requires you to adopt MySuper. Employees can nominate their own fund; if they do, you must pay to their nominated fund.
2. Audit your payroll system. Does it:
- Calculate OTE correctly?
- Pay super contributions on the same day as wages?
- Generate ATO-compliant records?
- Handle multiple funds (if employees have nominated different funds)?
If your system doesn’t support Payday Super, contact your payroll provider immediately or consider switching.
3. Test a pay run. Run a test payroll for your next pay cycle. Verify:
- Gross wages are correct
- OTE is calculated accurately
- Super at 12% is calculated on OTE
- Super amount appears in your banking (alongside wage payments)
- Payroll records show wage and super dates clearly
4. Brief your employees (optional but smart). A quick email or payroll note explaining the change reduces confusion. You could say: “From 1 July 2026, your super contributions will be paid on your payday, alongside your wages — no change to your take-home pay.”
5. Update your banking arrangement. Contact your bank to ensure:
- You can schedule simultaneous wage and super payments
- You can split payments if they go to different accounts
- Your approval workflows (if multi-step) don’t delay payment
6. Notify your super fund. If you self-manage super or use a scheme outside MySuper, confirm with the fund trustee that they can receive contributions on the same day as wages.
Common Mistakes Employers Make
Mistake 1: Calculating super on take-home (net) wages. Super is calculated on gross OTE, not what the employee receives after tax. If you pay 12% on net wages, you’re underpaying super significantly.
Mistake 2: Delaying super by a few days. “Same day” means the calendar day you pay wages, or the next business day if that’s a weekend/public holiday. Delaying super by three business days is non-compliance.
Mistake 3: Excluding allowances from OTE. Travel allowances, shift allowances, and other regular payments are part of OTE. Excluding them means underpayment.
Mistake 4: Forgetting part-time employees. If a part-timer earns over $11,800 per year (even across multiple part-time roles), they’re entitled to super. Many employers miss this.
Mistake 5: Not updating when an employee nominates a new super fund. When an employee provides a fund nomination, you must update your records and pay their super to that fund. Continuing to pay to your default fund is non-compliance.
What Happens If You Don’t Comply?
ATO action:
- Compliance notices and fines
- Penalties of up to 200% of unpaid super
- Mandatory backpayment plus interest
Fair Work complaint:
- Employees can lodge an underpayment claim
- Fair Work Commission can order you to backpay super plus interest
- Potential unfair dismissal claim if employee is dismissed for raising the issue
Reputation:
- Super underpayment makes headlines quickly
- Employees talk — poor word-of-mouth affects recruitment
- Media scrutiny if the amount is significant
Practical Example
Emma earns $50,000 per year (fortnightly salary).
Old rule (until 30 June 2026):
- You could pay quarterly super in July, October, January, April
- Example: $1,500 per quarter ($50k × 12% ÷ 4)
- Super payment date doesn’t align with wage payment dates
New rule (from 1 July 2026):
- Every fortnight, when Emma’s $1,923 gross is paid, you also pay $230.76 super (fortnightly)
- Same day payment: Emma’s bank account receives wages + super fund receives contribution on identical dates
- Transparent, clear, auditable
Frequently Asked Questions
Yes, if the employee is paid for the day (public holiday pay, paid sick leave), that payment is included in OTE for super calculation purposes.
LSL payments are included in OTE. When they return from LSL, Payday Super applies immediately to their next wage payment.
No. Contractors are not entitled to super. You have no obligation to contribute. (However, if someone is misclassified as a contractor but is actually an employee, super obligations apply.)
No. Each employee’s super must be paid on their payday. If you have staggered pay dates, you’ll have staggered super payments too.
The labor-hire company (not you) is responsible for super contributions to their staff. For contractor arrangements, there’s no super obligation.
No change required. Existing fund arrangements continue. Payday Super is only about timing, not fund selection. Employees can switch funds anytime under existing rules.
Calculate OTE based on actual earnings for that pay period. If an employee earns commission one week and a base wage the next, super is 12% of whatever they earned that week.
This is a gap you must address before 1 July. Contact your fund (or switch) to a provider that supports Payday Super. Most major funds and MySuper products now support this.
No. Employees don’t have a legal obligation to contribute (though some awards may require it). Payday Super affects employer contributions only.
No. The rate is still 12% of OTE. Payday Super simply changes the timing, not the amount. However, if you were previously underpaying due to batching errors, bringing payments into alignment will expose that.
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