Payday Super policy details released

Treasury has released draft details in relation to the implementation of the Payday Super regime. The proposed measures seeks to ensure that from 1 July 2026, employees will be required to pay employees super at the same time they pay salary and wages.

Whilst the changes were designed to ensure that employees do the right thing, the ATO estimates that $3.4 billion worth of super went unpaid in the 2019 – 2020 financial year. These underpayments are negatively affecting retirement outcomes for means of Australians. Research supporting the switch shows that more frequent contributions puts employees 1.5% better off at retirement.

It is proposed to introduce a new seven-day due date for contributions to arrive which allows for the movement of funds through the payment system, including superannuation specific clearing houses. Other changes proposed include:

• organisations failing to make the payments will incur General Interest Charges on a compounding basis, above the current interest rate set at a flat 10% per annum
• the administrative component of the Superannuation Guarantee (SG) charge will be calculated as an uplift of up to 60% of the SG shortfall rather than $20 per employee per quarter
• The SG charge will become tax-deductible
• the superannuation penalty regime will be revised where additional penalties of up to 50% of the SG charge will be applied for non-compliance
• the Small Business Superannuation Clearing House will be retired from 1 July 2026, with the government working with businesses on alternative solutions
• late contributions will automatically be applied to the earliest possible payday with an outstanding SG shortfall

Disclaimer: This does not purport to be comprehensive or to render legal advice. You should not act based on any information contained in this publication without first obtaining specific professional advice. Consult your legal advisor to determine if this applies to you.