Employer super obligations in Australia, payday Super and what you must pay

Superannuation is the payroll obligation most likely to trip up a small Australian business, and the rules changed in a major way on 1 July 2026. Under the new Payday Super system, employers must pay the super guarantee for every payday instead of quarterly, calculate it on a broader earnings base called qualifying earnings, and have the money sitting in the employee's super fund within 7 business days of paying wages. Get it wrong and you face the super guarantee charge, interest that compounds daily, and penalties.

This guide sets out what the obligation actually requires of you: who you must pay super for, what you calculate it on, when the money must reach the fund, where it must be paid, what you report, and what happens when a payment is late. If you run payroll yourself, or you are reviewing it after the changeover, this is the checklist to work from. The obligations sit in the Superannuation Guarantee (Administration) Act 1992 (Cth) and are administered by the Australian Taxation Office.

Who you must pay super for

The obligation is not limited to full-time permanent staff. Under the ATO's eligibility rules, you generally pay super guarantee for a worker if any of the following applies:

Age and hours: the worker is 18 or over, regardless of how many hours they work, or under 18 and works more than 30 hours in a week (you count actual hours, not an average across a fortnight or month).
Employment type: the worker is full-time, part-time or casual.
Relationship to the business: the worker is a family member working in the business, or a company director who falls within the extended definition of employee.
Residency: the worker is a temporary resident, including a working holiday maker or backpacker.
Contractor: the worker is an independent contractor paid mainly for their labour rather than for a result, equipment or materials. You calculate super on the labour component of their invoice, even if they quote an ABN.
Performer: the worker is a sportsperson, performer or film maker receiving payments for those activities.
Domestic or private work: the worker is a nanny, housekeeper or carer working more than 30 hours a week in your home.

There is no minimum earnings threshold. The old $450-a-month rule was abolished from 1 July 2022, so super is owed from the first dollar of qualifying earnings. There is a ceiling the other way: for 2026-27 the maximum contribution base is $270,830 a year, so once an employee's qualifying earnings reach that amount you can stop paying the minimum super guarantee for that year. The ATO's rates table sets out the current figures.

You do not pay super guarantee for yourself as a sole trader or partner, for reservists for their reserve service, or for non-resident employees working overseas (subject to exceptions such as bilateral social security agreements).

Calculate 12% on qualifying earnings

The minimum super rate is 12%, unchanged since 1 July 2025. What changed is the base you calculate it on. From 1 July 2026 you work out super on qualifying earnings, which the ATO explains as ordinary time earnings brought together with other payments.

Qualifying earnings include:

Ordinary time earnings: payments for ordinary hours of work, including casual loading, shift penalties, some allowances, bonuses and certain types of paid leave.
All commissions: including, for the first time, commissions paid for work done entirely outside ordinary hours. This is the one genuinely new inclusion, and for most employers it does not change the amount of super they pay.
Salary sacrifice amounts: if the sacrificed amount would have been qualifying earnings had it been paid as cash, it still counts. You cannot reduce your super obligation by salary sacrificing part of a salary into super.
Contractor payments: the labour component paid to contractors engaged mainly for their labour.

Payments that are not qualifying earnings include overtime (where the employee's ordinary hours are clearly identified in an award or agreement), expense reimbursements, fringe benefits, overpayments, employer-funded parental leave, and bonuses paid solely for work done outside ordinary hours. Note the contrast with commissions: a bonus for work done entirely outside ordinary hours does not attract super, but a commission for the same work does.

Termination payments are a common trap. Payment in lieu of notice is qualifying earnings, so super is payable on it. Unused annual leave and long service leave paid out on termination are not.

Pay within 7 business days of each payday

The timing rule is the biggest change in the system. Under the old quarterly regime, super was due 28 days after the end of each quarter, on 28 October, 28 January, 28 April and 28 July. From 1 July 2026 the payment deadline runs from every single payday.

Your contribution must be received by the employee's super fund, with enough information to allocate it to their member account, within 7 business days after the day you pay qualifying earnings (the QE day, which in most cases is your regular payday). A business day is any day that is not a Saturday, a Sunday or a public holiday for the whole of any Australian state or territory.

Longer periods apply in some situations:

New employee or new fund: the first contribution for a new employee, or to a new fund for an existing employee, must be received within 20 business days of the first payday.
Out-of-cycle payments: a bonus paid between regular paydays is generally covered by the contribution for the next regular payday.
Exceptional circumstances: the ATO can extend deadlines for employers affected by natural disasters or widespread IT outages.

Because a payment must be received by the fund, not merely sent, it is best practice to pay super on payday itself and let the payroll system or clearing house handle the transfer. Real-time payments through the New Payments Platform can reach the fund the same day. Also budget for the cashflow change: super that used to leave your account four times a year now leaves with every pay run.

Pay to the right fund

Super must go to the correct fund, or you risk a penalty on top of the shortfall. The ATO's order of priority is:

The employee's chosen fund: if they have nominated one, usually on the standard choice of fund form.
The employee's stapled fund: if they have not chosen. You request the stapled fund details from the ATO through online services, and since 27 March 2026 you can make that request and offer the stapled fund to the employee at the same time you give them the choice form.
Your default fund: but only where the ATO advises you that the employee has no stapled fund.

If an employee nominates a new fund, you have 2 months to start paying into it; in the meantime you pay to their stapled fund or default fund. Paying into the wrong fund can trigger a choice loading of 25% of the value of the contributions for the paydays involved, capped at $1,200 per notice period.

Report through Single Touch Payroll and SuperStream

Super guarantee must be paid electronically through SuperStream, and since 1 July 2026 your payroll software reports both qualifying earnings and the super liability to the ATO through Single Touch Payroll (STP) with each payday. The free Small Business Superannuation Clearing House closed on 30 June 2026, so if you were relying on it you need a commercial clearing house or payroll software with a super function. Super funds now have 3 business days to allocate contributions to member accounts, down from 20, which is why rejected payments need to be fixed quickly.

What happens if you don't pay: the super guarantee charge

If contributions are not received on time and in full, you are liable for the super guarantee charge (SGC). Under Payday Super the ATO assesses the charge itself and issues a notice of assessment; you no longer lodge a super guarantee statement. The charge has four components:

The unpaid shortfall: the super guarantee amounts still outstanding for each payday.
Notional earnings: interest at the general interest charge rate, compounded daily from the day after the payment deadline until you pay or the ATO assesses.
An administrative uplift amount: initially 60% of the shortfall plus notional earnings, reduced by 20 percentage points if the ATO has not assessed you for the charge in the previous two years, and reduced by up to a further 40 percentage points if you lodge a voluntary disclosure before assessment.
Choice loading: 25% of the value of the contributions for any payday where you did not follow the choice of fund rules, capped at $1,200 per notice period.

If you realise a payment is late but the ATO has not yet assessed you, pay the outstanding amount to the fund as soon as possible. Late contributions reduce the charge, but note that contributions are allocated to the earliest unpaid payday, not the payday you intended them for. If you do not pay an SGC assessment within 28 days, the ATO issues a Notice to Pay, and a late payment penalty applies if that is not met. Penalties are 25% or 50% of the unpaid charge depending on whether you have prior penalties.

There are two changes worth knowing. First, from 1 July 2026 the super guarantee charge is tax deductible, including the notional earnings and administrative uplift components (the late payment penalty and general interest charge on an unpaid assessment are not). Second, the ATO has said its first year of Payday Super will be supportive, focusing compliance action on employers who are not moving to payday payments, not fixing errors, or not paying at all. That is a grace period, not a free pass.

A compliance checklist

Run through this checklist with each pay run, and again whenever your workforce or pay structure changes, to keep every obligation current:

Payroll settings: confirm your software is on Payday Super frequency and reports qualifying earnings and super liability through STP.
Pay on payday: set the super payment to leave with each pay run so it clears within 7 business days.
New starters: give the choice of fund form, request the stapled fund at the same time, and allow 20 business days for the first contribution.
Commissions: check whether any commissions paid for work outside ordinary hours are now included.
Termination pays: pay super on payment in lieu of notice, and not on unused annual leave or long service leave.
Records: keep records of your super calculations and payments, including the fund details and dates.
Review each year: confirm the 12% rate and the maximum contribution base ($270,830 for 2026-27) at the start of each financial year.

When you need a lawyer

The rules are straightforward for a stable workforce paid a simple salary, but they fray at the edges. Get advice when:

Worker classification matters: deciding whether a regular contractor is really an employee, or a contractor paid mainly for labour, affects both super and employment law exposure.
Awards and agreements apply: enterprise agreements can require super above 12%, and award definitions of ordinary hours affect what counts as qualifying earnings.
Pay is structured: inclusive-of-super packages, salary sacrifice, commissions and bonuses all need the remuneration documented and the super base calculated correctly.
The ATO is involved: after an SGC assessment, a lawyer can help with voluntary disclosure, objections and penalty reduction.
Arrangements change: terminations, restructures and director remuneration each have super consequences that are easy to miss.

A lawyer's role is to map your workforce against the eligibility rules, review contracts for remuneration clauses, check your payroll settings against your actual pay practices, and handle ATO correspondence if something has gone wrong.

The deadline that catches businesses out

The part of this system most likely to cost your business money is the timing. For two decades the habit was quarterly: batch the super four times a year, lodge, move on. Under Payday Super the clock restarts at every payday, the money must be received by the fund within 7 business days, and interest compounds daily from the day after the deadline. Payroll software still set to quarterly processing, or a habit of paying super "when we get around to it", is the fastest route to an SGC assessment. This week, open your payroll settings and confirm the super payment rides on each pay run. The first payday is the cheapest one to get right, and the ATO's supportive first-year approach will not last forever.