Written by: Sheoni Dunlop | Senior Trainer (Tax) | TaxBanter
On 9 October 2025 the Government introduced Bills and an Explanatory Memorandum into Parliament to align the payment of eligible superannuation guarantee (SG) contributions with the day employees are paid their qualifying earnings. The core documents are:
- Bills: Superannuation Guarantee Charge Amendment Bill 2025 and Treasury Laws Amendment (Payday Superannuation) Bill 2025
- Explanatory Memorandum: EM
In short, “Payday super” aims to make super payments happen when ordinary time earnings (OTE) are paid, so unpaid super becomes obvious much sooner. The proposals are intended to reduce unpaid SG by aligning timing and increasing transparency.
Payday super is proposed to start from 1 July 2026.
Key changes employers should know
- Same-day payment: SG must be paid on the same day OTE is paid.
- Timing for late payments: A contribution is considered late if it reaches the super fund more than seven working days after OTE was paid.
- Basis for SG charge: The SG charge will be calculated on OTE, not on salary, aligning it with the basis for calculating underpaid super.
- Administrative uplift: An initial administrative uplift of 60% will apply.
- SG statement changes: Employers will no longer use an SG statement for underpaid SG; instead, voluntary disclosure can be used to reduce the administrative uplift.
- Tax treatment: On-time payments, late payments and any SG charge will be deductible.
There are additional changes included in the Bills and Explanatory Memorandum, as well as information regarding the first year transitional period.
What the ATO has said for the first year
On 9 October 2025 the ATO released PCG 2025/D5 – guidance on their approach to the first year of Payday super. As you would expect from a PCG, it provides an indicator of whether the Commissioner is likely to apply compliance resources depending on the risk zone that employers fit into. The guidance in the PCG is limited to the first year of operation of Payday super.
See the ATO guidance here: PCG 2025/D5 – Payday Super first year ATO approach.
Risk zones
- Low risk: Employers who make SG contributions at the same time they pay employees, but whose payments are rejected by funds and then promptly fixed, are likely to be low risk.
- Medium risk: Employers that continue quarterly SG payments will generally fall into the medium-risk zone.
- High risk: Employers who make insufficient contributions, or otherwise show ongoing non-compliance, will be treated as high risk.
The PCG also makes clear that if the ATO obtains evidence of an SG shortfall, it must apply the law even where an employer would otherwise fit a low-risk profile.
Practical next steps
- ATO Small Business Superannuation Clearing House (SBSCH) users – start transitioning now: new registrations closed on 1 October 2025, existing users will have access until 30 June 2026, and the ATO will stop processing clearing house payments from 1 July 2026.
- Stay alert for law changes: Bills are still before Parliament, keep tuned for updates.
