The ultimate guide to Payday Super for employers (2026)

From 1 July 2026, employers must pay Superannuation Guarantee (SG) contributions on payday, rather than quarterly. Super must be received by employees’ super funds within seven calendar days of each payday.

The reform is designed to reduce unpaid super (estimated at ~$5.2 billion annually), improve retirement outcomes and help employees see super contributions in real-time.

Payday Super introduces a single, streamlined earnings base called Qualifying Earnings (QE). This replaces the distinction between “OTE for contributions” and “salary & wages for SG Charge calculations.”

QE is largely aligned to today’s OTE, with additions such as salary-sacrificed amounts and payments covered by the extended definition of employee under s 12.

SG is now calculated and tested per payday on QE.

STP reporting changes 

Employers will be required to report the following each pay cycle through STP:

• the Qualifying Earnings (QE) amount, and
• the super liability generated for that payday.

This supports earlier detection of missed or late SG and payroll software updates (including Employment Hero Payroll) will surface this automatically when STP changes go live.

Under the current legislation, contributions must be received by the fund within seven business days of each payday. This includes weekends and public holidays, so paying on or before payday is recommended.

If it’s an “out-of-cycle” payment (bonus, back pay), super can be paid with the next regular pay run instead of immediately.

You can keep your pay frequency but super for that cycle must still reach the fund within seven days of payday.

You can start making more frequent super contribution payments as soon as you are ready. Employment Hero already has customers who are completing super contribution payments as part of their standard payroll cycle.

Super is considered on time when the employee’s super fund receives and can allocate the contribution within seven business days of the Qualifying Earnings (QE) day.

• The QE day is the day you pay the employee their salary or wages (the actual payment date, not the day you process payroll).
• If you pay employees on the 15th, super for that pay is due (on time) only if the fund has received and allocated it by seven business days after the 15th.

Your payment date alone does not determine compliance — timing depends on when the fund receives and can allocate the contribution.

This distinction is critical because:

• Different payment rails (BPAY, EFT, NPP) settle at different speeds.
• A faster payment method reduces the risk of missing the seven-business-day deadline.

Yes, the legislation provides an extended period of up to 20 business days from the QE day for:

• the first contribution for a new employee, or
• the first contribution to a new super fund for an existing employee.

If the extended period overlaps with subsequent QE days (for example, in a fortnightly payroll), the “bunching” rule applies:

• the later deadline becomes the due date for all overlapping contributions

This rule applies the same way whether employees are:

• paid fully in advance,
• fully in arrears, or
• paid using a combination of both.

If you pay in advance and an employee leaves mid-cycle, you must adjust any overpayment in their final pay.

If an employee leaves mid-month, you must correct their earnings and SG before making the payment. Employers should avoid overpaying SG, as recovery from funds is unlikely once the contribution is allocated.

Funds rarely return contributions already allocated, so employers should aim to correct any overpayment before contributions are sent

Out-of-cycle payments (including late timesheets) create their own QE day. This means they also create their own seven-business-day window for super to be on time.

You may include the correction or late timesheet in your next regular pay only if the fund will still receive and allocate the contribution within the original seven-business-day window for that QE day.

If you cannot meet that timing, you must process the super sooner, otherwise it will be late and may trigger the SG charge.

Yes, Employment Hero will continue to support the Beam integration and ability to export SuperStream alternative file format (SAFF) extracts for other clearing solutions. Clearing houses are updating their processes in response to Payday Super.

The current legislation states Employers remain responsible. We suggest employers submit payments on payday (or earlier) and keep proof of lodgement.

We are still early building this solution so cannot confirm yet if it will support payments from multiple bank accounts. However, this is very valuable feedback that we will account for in development.

HeroClear will be simple to enable inside Employment Hero Payroll. Once switched on, super will be processed automatically as part of each pay run. No separate clearing-house portal, bank file upload or manual process required.

To get ready, employers will only need to complete a small amount of one-off setup when opting in:

• Choose a funding method (PayTo, direct debit or bank transfer).
• Configure any necessary bank approvals (e.g. dual authorisers).

After that, HeroClear takes over. It validates employee fund details, initiates payments, tracks fund receipt and manages errors or rejections with real-time visibility, supporting a far more automated Payday Super workflow.

Important note on compliance: 

HeroClear will automate a lot of the process, but employers still remain legally responsible for SG compliance.

Super is considered “on time” only when the fund receives and can allocate the contribution within the required window:

• For each payday (QE day): contributions must be received within 7 business days.
• For first-time payments (new employee or new fund): the law provides an extended window of up to 20 business days.

HeroClear’s automation, validation and real-time updates make meeting these deadlines significantly easier, but employers should still monitor pay run accuracy and respond to any alerts that require attention (e.g., missing fund details from an employee).

Under Payday Super, most employers will find it significantly harder to meet the seven-business-day requirement using manual bank payments or separate clearing-house workflows.

Because HeroClear is fully embedded inside Employment Hero Payroll, there is no need for a separate clearing house or bank payment process. Super is validated, paid and tracked automatically as part of the pay run.

HeroClear supports PayTo/NPP, direct debit and bank transfer, with built-in validation, status tracking and audit trails that help employers meet Payday Super timing obligations with far less manual effort.

Small Business Super Clearing House (SBSCH):

The ATO’s SBSCH retires from 1 July 2026 (and was closed to new users from October 2025). Employers currently using the SBSCH will need to transition to an alternative solution before the shutdown.

HeroClear provides an integrated, automated alternative that removes the need for separate uploads, portals or banking steps.

HeroClear is a first-of-its-kind, fully embedded clearing and validation solution built specifically for Payday Super. Unlike traditional batch-based clearing houses, HeroClear:

• Runs directly inside EH Payroll; no uploads, exports or portals.
• Uses faster payment rails (e.g., NPP/PayTo where supported) for quicker fund receipt.
• Delivers digital employee onboarding to validate employee fund details up front (USI/member checks) to prevent rejections.
• Automatically notifies employees when an error occurs that needs them to update their super fund details. 
• Provides real-time status updates and automated error resolution.
• Creates an audit-ready record of attempts, rejections and resolutions aligned to ATO expectations.

These features significantly reduce the risk of missing the seven-business-day requirement and lower the admin burden when compared with traditional clearing workflows.

Traditional clearing houses will continue to operate, but they typically rely on slower, batch-based processing and manual workflows that increase the risk of missing the seven-business-day requirement.

You do not need to move unless you choose to. HeroClear simply provides a faster, automated, more accurate and more compliant alternative by being directly integrated inside Employment Hero Payroll.

No, customers will not be automatically moved.

You can choose to stay with your existing clearing solution if it continues to meet your needs and complies with Payday Super requirements.

HeroClear simply provides a faster, more accurate alternative by:

• Removing manual steps
• Reducing errors and rejections
• Providing a single payroll-based workflow
• Offering clearer visibility into fund receipt

Businesses that want stronger compliance protection and reduced admin under Payday Super may choose to switch, but migration is optional.

HeroClear will support a range of modern, compliant payment methods designed for fast settlement and real-time visibility under Payday Super:

Supported payment methods

• PayTo (real-time pull) – preferred method where available, providing fast settlement and real-time confirmation.
• Direct debit (batch pull) – initiated in Employment Hero Payroll with approvals handled through your bank.
• Bank transfer via NPP (real-time push) – supported with workflows designed to accommodate dual-authoriser accounts.

These flows are built so that approvals and authorisation work end-to-end without requiring separate clearing-house portals.

Manual payments

In exceptional circumstances, contributions can be marked as manually paid with an audit trail.

However, manual workflows increase the risk of breaching the seven-business-day rule and should only be used where absolutely necessary.

BPAY and other legacy methods

BPAY may still be available to some funds, but it is not recommended as the primary method under Payday Super because:

• BPAY settlement times are slower
• BPAY does not provide real-time confirmation
• SuperStream v3 and the new Payday Super ecosystem are shifting toward NPP/PayTo-based payments with better error messaging and faster allocation

Where possible, employers should transition to faster rails to reduce timing and compliance risks.

Debit/credit card payments

Employment Hero is considering support for debit/credit card payments for SG contributions where aligned with customer needs. More information will be provided if this becomes available.

HeroClear is designed to work seamlessly with businesses that require two or more approvers for payments. The dual-authorisation process will differ depending on the payment method you choose:

1. Pull payment methods (NPP PayTo or Direct Debit)

Dual authorisation is captured upfront when the PayTo or direct debit mandate is established during HeroClear onboarding. Once authorised, no ongoing manual approval is required for each pay run, unless your bank imposes additional internal controls.

2. Push payment methods (PayID or PayAnyone bank transfer)

Dual authorisation occurs within your bank, exactly as it does today. When a pay run is finalised, the payment instruction will appear in your bank’s approval queue (internet banking or mobile) and the required approvers must authorise it before the payment is released.

Additional controls inside Employment Hero

Employment Hero Payroll will also introduce an optional Payment Approver action for HeroClear payment processing. This allows you to maintain internal payment approval workflows in addition to your bank’s dual-authoriser process.

Why this works well under Payday Super

• It ensures no change to existing bank security controls or signatory rules
• HeroClear ensures end-to-end traceability, even though the bank handles the approvals
• Faster rails (PayTo/NPP) still support dual authorisation in banks that allow multi-party approval on NPP-initiated payments
• Employers meet Payday Super timing without compromising their internal governance processes

Yes. HeroClear is being designed to help employers stay compliant by validating super details before money moves. This includes:

• Fund and USI validation: HeroClear checks the fund, USI, member details and bank routing information where available to prevent rejections.
• Member Verification Requests (MVRs): As funds and gateways adopt new verification services, HeroClear will connect to them, enabling upfront checks that reduce the chance of payments being rejected or refunded after submission.
• Fund mergers and product changes: HeroClear will surface updated fund information and prompt employers to refresh employee details when a fund changes USIs, products or merger details.

HeroClear’s logs and audit trail (attempted dates, payments, rejections and resolutions) help employers demonstrate reasonable steps were taken. This is important if the ATO reviews a case under the Payday Super regime

It is the employer’s responsibility to re-submit to the correct fund as soon as you have the new details. It is best to keep records; the ATO has limited discretion where the delay is beyond your control.

Yes. Funds must notify employers and the ATO at least 2–4 weeks in advance. There will be improved notifications in the event of fund closure or merger.

Fund mergers and product changes are becoming more frequent across the industry. When a fund merges, its USI, product identifier, ESA or bank details may change. Contributions sent using old details may be rejected until the new information is updated.

HeroClear is designed to help manage these transitions by:

• checking employee fund and member details before payment
• receiving updated registry data from funds as part of validation
• alerting employers when details need updating
• reducing the risk of returned contributions during merger periods

Once updated, HeroClear guides re-submission so you can stay within, or as close as possible to, the required timeframes.

A payment is only “on time” if it is received and allocatable by the fund. If a fund rejects a payment (e.g., wrong USI or invalid member number), it is considered unpaid, and you must resubmit promptly to stay within the 7-day window.

Moving from quarterly payments to contributions every pay cycle creates a cash-flow pull-forward. Instead of holding super for up to 3 months, employers will need to fund super at each payday.

For many SMBs, our internal analysis indicates an average cash-flow impact in the order of ~$124,000 per year when shifting from quarterly to per-pay-cycle contributions (actual impact varies by workforce size, pay frequency and industry).
To understand your specific position, use the Employment Hero Payday Super Cash-Flow Impact Calculator to model your upcoming payroll cycles.

Practical planning steps

• Model early and phase in changes: For example, move from quarterly → monthly → every pay cycle as you adjust.
• Align billing and revenue cycles with payroll: where possible, this helps smooth out cash timing differences.
• Review working-capital options: Seek professional advice if you expect short-term cash-flow pressure during the transition.
• Use an embedded clearing solution (e.g. HeroClear): This helps avoid operational slippage or late payments, which under Payday Super may create SG Charge exposure.

The current draft legislation does not include any concessions. The new rules apply to all employers, regardless of size. However, Employment Hero has been advocating with the government for a phased roll out, to better support small businesses through the transition.

To date, we have not heard any consideration for cashflow assistance measures for business during the transition period.

We have not received exact details of how this will happen and understand this remains under consideration. However, the ATO does have the ability to match STP payroll data (when wages are paid) with fund data (when super is received) via SuperStream. If there’s a mismatch, employers may face the Superannuation Guarantee (SG) charge.

If contributions aren’t received within seven days of payday, employers incur an SG shortfall, plus interest and penalties (up to 60% of the shortfall).

The ATO does. They will raise the SG charge if payments are late or missing, based on STP and fund data. It is not handled through your clearing house.

Employers must lodge a Superannuation Guarantee (SG) statement with the ATO when super is missed or underpaid. The ATO provides an online SG statement form through the Business Portal/Online Services for Business.

The 7-business-day rule applies to all employers, regardless of size. There are no statutory carve-outs for small, micro or seasonal businesses, even during shutdowns or staff leave periods.

Practical ways to manage this

• Schedule pay runs ahead of known shutdowns: Run payroll early (including SG) before public holidays, seasonal closures or extended leave periods. Make sure bank authorities and dual-approvers are in place ahead of time
• Use embedded, automated clearing: Tools like HeroClear will allow super to flow as part of each pay run, reducing reliance on a single payroll person and lowering the chance of delays.
• Have clear delegation or backup arrangements: Set up temporary payroll approvers or bank signatories before the shutdown so critical actions aren’t blocked.
• Don’t rely on the ATO’s first-year leniency: The ATO’s Draft PCG provides a risk-based approach (focusing on repeated or high-risk non-compliance), but employers should still design processes that consistently meet the 7-business-day rule.

Employers must take reasonable steps to collect accurate super details from employees, but they are not expected to verify everything manually.

If an employee does not provide fund details, employers must request the employee’s stapled fund through the ATO Online Services or use a compliant default fund where allowed under ATO rules. HeroClear digital onboarding services automate these activities for employers as part of the employee super choice process during onboarding. 

If an employee provides incorrect super information, the employer is still responsible for ensuring the contribution reaches the fund. Under Payday Super, contributions that are rejected because of incorrect details may fall outside the 7-business-day window (or 20 days for newly onboarded employees or change of funds events), creating an SG shortfall if not corrected quickly.

HeroClear reduces this risk by performing data validation before money moves and alerting the employer when details need to be updated. Employers must still correct the information, but HeroClear helps them demonstrate that they took reasonable steps to stay compliant.

Under Payday Super, if contributions are not received by the fund within 7 business days of each QE day, the employer may have an SG shortfall and become liable for the Super Guarantee Charge (SGC).

The SGC has been recalibrated under the new law and can be materially higher than under the old quarterly model.

What’s included in the new SGC?

The SGC for each affected QE day includes:

• Individual final SG shortfalls: What should have been paid, still outstanding at assessment time.
• Notional earnings: A daily compounding interest amount (based on the GIC rate) applied to unpaid or late SG.
• Administrative uplift (default 60%): A surcharge applied to the total of shortfalls + notional earnings.
  This uplift is new and significantly increases the cost of non-compliance compared with quarterly rules.
• Choice loading (if applicable): An additional amount where the employer has not complied with choice-of-fund obligations (such as not paying to the fund the employee selected).
• Late payment penalty: This may apply if the assessed SGC is not paid after the ATO issues a notice.

Why is the new SGC more expensive?

The new framework is designed to strongly incentivise on-time contributions for each payday. The combination of:

• daily compounding notional earnings,
• the administrative uplift, and
• loss of late payment offset (no longer available for post-assessment contributions) means that even short delays can result in higher liabilities than employers experienced under the previous quarterly model.

How the administrative uplift can be reduced

The default 60% uplift can be lowered if the employer meets specific criteria:

• Reduced to 40% if the employer has not had a Commissioner-initiated SGC assessment in the past 24 months.
• Reduced further (potentially to 0%) depending on how quickly the employer lodges a voluntary disclosure statement before the ATO issues an assessment.

Tax deductibility

The ATO has indicated that under the new framework, the SGC will be tax-deductible, aligning tax treatment with paying employees’ super directly.

This would primarily depend on the contractual agreement. If a contractor is deemed an “employee” for SG purposes (paid mainly for their labour), Payday Super rules apply. Super is due within seven days of the payday (when you pay them), not the invoice date. We recommend employers carefully review contractor agreements and seek legal advice as required.

If you pay a contractor outside Employment Hero Payroll, but the contractor is deemed an employee for SG purposes (e.g., labour-only contractors under s 12(3)):

• The QE day is still the day you pay them, even if the payment doesn’t occur through EH Payroll.
• You must still ensure contributions are made and received by their super fund within 7 business days.
• Employers remain responsible for entering the payment and super details accurately so SG obligations can be calculated and tracked.

If super is processed outside the platform, Employment Hero cannot automatically track whether contributions meet the 7-business-day requirement, and employers must manage timing and compliance manually.

You must request their choice. If not provided, the ATO will supply their stapled fund. Employers cannot delay payments waiting for employee information and should revert to the employees’ stapled fund or the employer default fund as needed. Also, for new employees, employers have 21 days to submit the super contribution after the first QE day. If the next QE day is within 14 days, it is still due within 21 days of the first QE day.

Yes. The Payday Super rules apply to all employers, including charities and NFPs.

For contractors deemed employees for SG purposes (e.g., labor-only), the QE day is the day you pay their invoice. The standard 7-business-day receipt rule applies from that payment date.

Directors & closely-held employees

Where directors or closely-held employees receive payments that fall within the QE definition (wages, fees, bonuses, allowances, etc.):

• the QE day is the day the payment is made, and
• the standard 7-business-day rule applies.

Sole traders without employees

Sole traders paying themselves are not employees for SG purposes, so Payday Super does not require SG contributions. However, they may choose to make personal concessional contributions (which fall outside the Payday Super timing rules). Independent tax advice is recommended.

If an employee has a Self-Managed Superannuation Fund (SMSF) and is eligible for SG, they follow the same Payday Super rules as any other fund:

• The QE day is when the employee is paid.
• Super contributions must be received and allocatable by the SMSF within 7 business days of the QE day.

To prevent delays, employers must ensure they have accurate SMSF details, including:

• the SMSF bank account
• electronic service address (ESA)
• fund ABN and member number

The Small Business Super Clearing House will close to new users from October 2025 and shut down completely by June 2026. Businesses must switch to an alternative clearing solution.

The SBSCH stopped accepting new business registrations in October 2025 and will close entirely on 30 June 2026. Current users must transition to an alternative solution before the shutdown.

The fund must receive the payment by 30 June. Pay early, check provider cut-off dates and use faster payment options like NPP to avoid missing deadlines.

No, the ATO has indicated that under the new framework, the SGC will not be tax-deductible. The actual super contributions may be tax deductible, but any related SGC will not be.

There is a risk, as in some cases the timing may result in 13 contributions in a year. The Treasury was provided this feedback during industry commentary on the draft legislation. If this event were to transpire, we recommend employers flag this with affected employees as early as possible.

Super contributions generally cannot be refunded to the employer once allocated. Overpayments stay in the employee’s account. This is why it is important to use an integrated payroll system to help with the accurate calculation and payment of super contributions. 

You must correct their earnings and SG before making the final payment. Recovering SG from a fund once it is allocated is extremely difficult, so employers should aim to correct errors before contributions are sent.

Many funds treat overpaid SG as additional contributions rather than issuing refunds. Refunds are generally limited to clear administrative errors, so it is vital to aim for correction before contributions are sent.

Maximum Contributions Base (MCB)

The MCB moves from a quarterly cap to an annual cap under Payday Super. Key points:

• The cap is applied across all QE days for the year, per employer.
• Payroll will need to apply this across the year.
• Complex remuneration structures; e.g., large bonuses, multiple employers, heavy salary sacrifice, may require independent advice.

Employees previously considered “super capped” on a quarterly basis will now be monitored against the annual MCB instead