Payday Super: A Practical Guide for Small Employers and NFPs
Last updated: 25 October 2026.
Payday Super changed how employers pay super guarantee. From 1 July 2026, the ATO says you must pay super for each payday instead of quarterly. For small employers and not-for-profits (NFPs) with employees, that is a shift in cash flow, payroll routine and record keeping. In this guide we cover what changed, how the 7 business day rule works, and a practical routine to keep on track.
It is general information based on the ATO’s guidance. The ATO’s pages are the final word, so check ato.gov.au for the latest.
What changed on 1 July 2026
According to the ATO’s “About Payday Super” page (last updated 10 August 2026), from 1 July 2026 you must:
- pay employees their super guarantee for each payday, instead of quarterly; and
- calculate super on an employee’s qualifying earnings, a new term that brings together ordinary time earnings and other payments.
The ATO says Payday Super does not change who you pay super for, the 12% rate, or the systems used to make contributions, except that the Small Business Super Clearing House has now closed. Independent contractors who are paid mainly for their labour are still treated as employees for super guarantee purposes.
| Before 1 July 2026 | From 1 July 2026 | |
|---|---|---|
| Deadline | Received by the fund within 28 days of the end of each quarter | Received by the fund within 7 business days after payday |
| Basis | 12% of ordinary time earnings | 12% of qualifying earnings |
| STP reporting | Ordinary time earnings or super liability | Both qualifying earnings and super liability |
| Fund allocation time | 20 business days | 3 business days |
The ATO’s page notes that the payday rules apply only to employee earnings paid from 1 July 2026. For earnings paid up to 30 June 2026, the quarterly rules still apply.
The 7 business day rule, in plain English
The ATO says your contribution is on time if it is received by your employee’s super fund, with all the information needed to allocate it to the employee’s account, within 7 business days after you pay the employee. The day you pay qualifying earnings is called the QE day, and in most cases that is your regular payday.
Three details matter in practice:
- “Received” means received. The deadline is about when the fund receives the money, not when you send it. If you use a clearing house, including one inside your payroll software, you need to allow time for it to process the payment. The ATO’s advice is to pay super on payday.
- What counts as a business day. Any day other than a Saturday, a Sunday, or a public holiday for the whole of any Australian state or territory. A state-wide holiday anywhere in Australia is not a business day, even if you are not in that state.
- The rule covers more than staff on your payroll. It applies to everyone entitled to super guarantee, including contractors paid mainly for their labour and company directors.
When you get longer
The ATO describes some situations where you have longer than 7 business days:
- A new employee, or a new fund. For the first contribution for a new employee, or the first contribution to a new complying fund for an existing employee, the contribution must be received within 20 business days after the QE day. Later paydays go back to 7 business days.
- Out-of-cycle payments. A bonus or back payment made outside the normal pay schedule is due within 7 business days after the next regular payment of qualifying earnings. In the ATO’s example, a $1,000 bonus paid on 7 December 2026 to a weekly-paid employee whose next regular pay is on 10 December 2026 is due on 21 December 2026, the same day as the contribution for the 10 December payday.
- Exceptional circumstances. The ATO can determine that a class of employers is affected by a natural disaster or widespread IT or communications outage. You do not apply for this.
Qualifying earnings and the 12% rate
The minimum super guarantee is 12% of qualifying earnings for the pay period. In the ATO’s example, an employee paid a fortnightly wage of $3,000 for ordinary hours has qualifying earnings of $3,000, so the super guarantee is $360.
The ATO says that for most employers, qualifying earnings do not change the amount of super you pay. Payments that were already counted up to 30 June 2026 continue to count. Qualifying earnings also include commissions for work done entirely outside ordinary hours, which you now need to include. Check the ATO’s qualifying earnings page for the full list.
What it means for cash flow
This is an illustration of our own, not an ATO example. Suppose an employee is paid $1,500 a week. Super at 12% is $180 each payday. Under the old quarterly system you could hold that money for up to a quarter. Now it leaves your account within days of every payday, alongside wages.
- Set aside super with each pay run, rather than topping up a super account at the end of a quarter.
- Check your pay cycle. Weekly, fortnightly and monthly cycles all work, but each payday starts its own 7 business day clock.
- Budget for super as a regular payroll cost in grant applications and NFP budgets, especially where a funder pays in arrears.
A practical checklist for small employers and NFPs
- Confirm your payroll software is set up for Payday Super. Ask your provider how it calculates qualifying earnings and how and when it sends super.
- Pay super on payday where you can. This is the ATO’s advice and it leaves the most margin.
- Check each employee’s fund details. Wrong or incomplete details can delay allocation, and the ATO says the deadline does not move because of an error or delay processing the contribution.
- Know your clearing house timing. If you rely on one, find out how long it takes.
- Replace the Small Business Super Clearing House. It is no longer available. If you used it, you need another way to pay.
- Keep records. Keep payroll, super payment and fund details together, and keep a note of anything that goes wrong and how you fixed it.
- Reconcile payroll to the books each month. Super payable and super paid should agree to your payroll reports.
If a payment is late or missed
The ATO says that if you miss a contribution you should fix it as soon as possible by paying the outstanding amount to the fund. Paying even part of it reduces the super guarantee charge you become liable for. Under Payday Super the charge is assessed by the ATO, so employers no longer lodge a super guarantee statement. It includes interest that compounds daily, and an administrative uplift amount, and it is tax deductible. Penalties are 25% or 50% of the unpaid charge, depending on any prior penalties.
The first year. The ATO says that in the first year of Payday Super (1 July 2026 to 30 June 2027) its focus is on helping employers transition. Under Practical Compliance Guideline PCG 2026/1 it will look at your behaviour, such as whether you are trying to pay each payday and fixing issues quickly, and will focus compliance action on employers who are not trying to adjust or not paying super at all. Do not read that as a pause on the 7 business day rule. The rule applies and the guideline is about how the ATO responds to mistakes.
Payday Super for NFPs
If your NFP has employees, the same rules apply. The ATO’s NFP guidance notes that organisations with employees have PAYG withholding, super and Single Touch Payroll obligations. In practice the biggest difference is cash flow: grant income often arrives in lumps while payroll and super are regular. Build super into your budgets and board reports, and see our guide to internal controls for NFPs for simple approval and review routines.
How we help
We help small employers and NFPs keep payroll, super and BAS in step: reconciling payroll to the books, preparing BAS, and keeping records tidy. See our small business accounting and support page and our page for charities and NFPs, or contact us to talk about your payroll set-up. Our 2026-27 BAS due dates guide has the lodgment dates.
Frequently asked questions
When did Payday Super start?
The ATO says Payday Super applies from 1 July 2026. For employee earnings paid up to 30 June 2026 the quarterly rules still apply.
How long do I have to pay super under Payday Super?
Contributions must be received by the employee’s super fund, with enough information to allocate them, within 7 business days after you pay the employee. The ATO says you may have longer in some situations, such as 20 business days for the first contribution for a new employee.
Does Payday Super apply to contractors?
The ATO says it applies to everyone entitled to super guarantee, including independent contractors who are paid mainly for their labour. Check ato.gov.au to see whether a particular worker counts.
Has the 12% rate changed?
No. The ATO says the rate is still 12%, but it is now calculated on qualifying earnings, a new term that brings together ordinary time earnings and other payments.
Is the Small Business Super Clearing House still available?
No. The ATO says it is no longer accessible from 1 July 2026, so employers who used it need another way to pay.
What if I miss a payment in the first year?
Fix it as soon as possible by paying the fund. The ATO’s first-year approach, set out in PCG 2026/1, looks at your behaviour and focuses on employers who are not trying or not paying. Read the ATO page for the details.
Sources and further reading
- ATO: About Payday Super (last updated 10 August 2026)
- ATO: Payment deadlines for Payday Super (last updated 29 September 2026)
- ATO: What payments are qualifying earnings (last updated 2 September 2026)
- ATO: Getting it right: compliance in the first year of Payday Super (published 23 June 2026)
- ATO: What to do if you miss a Payday Super contribution (last updated 27 June 2026)
This article is general information, not personal advice. Rules and dates can change, so check ato.gov.au or acnc.gov.au for the latest, or speak to us about your situation.