Treasury has finally unveiled the first glimpse of their Payday Super model, a significant shift in how superannuation will be paid in Australia. Initially proposed in the May 2023 Federal Budget, this initiative is set to launch by 1 July 2026, giving stakeholders three years to prepare for the new system.
What’s the big deal you ask? The key change? Superannuation will now be paid on payday, alongside wages, meaning employees’ super will be deposited with their wages, no more waiting until the end of the quarter!
The goal is to ensure super contributions are paid more consistently and faster, helping to protect workers’ retirement savings.
So here’s the lowdown:
- Super must be paid on the same day as wages, with funds required to receive contributions within 7 calendar days.
- A 2-week grace period for new employees allows some flexibility when onboarding.
- Small or irregular payments can be rolled into the next regular payday.
- Superannuation Guarantee Charge (SGC) penalties will be reduced, with concessions for those who voluntarily disclose issues.
- Super funds must process payments within 3 days, down from 20, ensuring efficiency.
What’s this mean for you?
Well not much right this moment, but the upcoming Payday Superannuation changes will streamline how businesses need to manage their superannuation payments. Planning ahead is crucial to ensure a smooth transition by 1 July 2026. Things for you to start to think about are:
- Adjusting cash flow management to accommodate more frequent super payments.
- Ensuring payroll systems are updated for timely contributions.
- Staying informed on SGC definition changes and reduced penalties for voluntary disclosure.
- Preparing to streamline processes with your superannuation provider.
If you’re wondering how the Payday Super model impacts your business, now’s the time to have a chat with your bookkeeper or accountant. They’ll help you understand the ins and outs of these changes and how they’ll affect your cash flow, payroll systems, and overall financial processes.