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On 6 November 2025, two bills amending the Superannuation Guarantee (Administration) Act 1992 (SGA Act) and Superannuation Guarantee Charge Act 1992 (SGC Act) to reform the superannuation guarantee (SG) framework, received parliamentary approval to become law.
Many businesses end up falling behind on their SG payments, and this measure essentially becomes a compliance check for the Australian Taxation Office (ATO).
Due to come into effect from 1 July 2026, the Payday Super legislation introduces a number of changes to the SG framework:
- Employers will be required to make SG contributions to an employee’s nominated superannuation fund within 7 business days of the employee’s regular wages being paid.
- SG contributions and SG shortfalls will be calculated using a new base called qualifying earnings (QE). This will align with Ordinary Time Earnings (OTE) and will also include salary sacrifice amounts.
- The maximum contributions base will shift from a quarterly basis to an annual basis. SG contributions will continue to accrue with each payday until the annual maximum contributions base threshold is reached.
- Employers will no longer need to lodge SG statements. instead, they can submit voluntary disclosure statements before an SG charge assessment is made.
- The ATO will issue SG shortfall assessments automatically using the data from Single Touch Payroll and super fund reporting.
First year compliance approach
The ATO has issued a draft practical compliance guideline (PCG 2025/D5) which sets out the first year ATO compliance approach for the period from 1 July 2026 to 30 June 2027. The PCG proposes 3 risk zones — low, medium and high.
Impact for your business
The amended SG framework will allow a tax deduction for both on-time and late eligible contributions, and the SG charge. However, GIC and late payment penalties related to the SGC will remain non-deductible.
For employers who have a payment plan with the ATO that consists of the SG charge and other tax debts, payments made towards the plan will be deductible up to the value of the amounts of the core SG charge.
For the Director Penalty Notice provisions, a company’s SG charge will be treated as being payable on the earlier of the first day after the end of the 60-day period starting on the QE day, and the day the charge is payable under an assessment of the SG charge.
Small Business Superannuation Clearing House (SBSCH) closing
As part of the Payday Super reform, the ATO has announced that the SBSCH will permanently close on 1 July 2026. New registrations ceased from 1 October 2025. These changes are designed to reduce the unpaid super risk, however, by doing so updates to payroll processes and super payments are required.
Contact LHP Partners for more information
With the commencement date approaching soon, consider reflecting on your current cash flow practices and plan ahead for the increased frequency of super payments for a smooth transition.
We can help you with this business planning and help determine the best course of action based on your business needs, including any potential issues you have with pricing.
