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Payday Super Glossary — Employer Guide
Payday Super starts 1 July 2026. Employers must pay super at the same time as wages, with funds received by the employee's super fund within 7 business days of payday.
A Message for Employers
Payday Super represents the biggest change to Australian superannuation compliance in over three decades. From 1 July 2026, the familiar rhythm of quarterly super payments ends — replaced by a requirement to pay super every time you pay your employees. Whether that's weekly, fortnightly, or monthly, contributions must reach your employees' super funds within 7 business days of each payday. The quarterly cash flow buffer many businesses have relied on will disappear, and the ATO will have real-time visibility over your SG obligations through Single Touch Payroll.
This glossary has been designed to cut through the jargon and give you a clear, practical reference for every key term, deadline, and obligation you'll encounter under the new rules. From understanding Qualifying Earnings to navigating the closure of the ATO's Small Business Clearing House, you'll find the definitions, thresholds, and links you need — all in one place.
The good news? The ATO has signaled a supportive, risk-based approach during the first year for employers making genuine efforts to comply. But preparation is everything — and understanding the language is the first step.
What Is Payday Super?
| Term | Explanation | Link |
|---|---|---|
| Payday Super | New law requiring employers to pay SG contributions each pay cycle (weekly, fortnightly, or monthly) instead of quarterly. Commences 1 July 2026. | ATO – About Payday Super |
| Treasury Laws Amendment (Payday Superannuation) Act 2025 | The legislation passed by Parliament in November 2025 that gives legal effect to the Payday Super changes. | ATO – Legislation |
| PCG 2026/1 | The ATO's Practical Compliance Guideline for the first year (1 July 2026 – 30 June 2027). Employers making genuine efforts to comply will be treated as low risk. | ATO – PCG 2026/1 |
Key Dates & Thresholds (2025–26)
| Item | Detail |
|---|---|
| Payday Super Start Date | 1 July 2026 |
| SG Rate | 12% of OTE / QE |
| Standard Payment Deadline | 7 business days after payday |
| New Employee Extension | 20 business days after first payday |
| Concessional Cap | $30,000/year |
| Non-Concessional Cap | $120,000/year ($360,000 bring-forward) |
| Division 293 Threshold | $250,000 (income + concessional contributions) |
| SBSCH Closure | 1 July 2026 |
| ATO First-Year Approach | Risk-based compliance (PCG 2026/1) |
| Super Fund Allocation Window | Reduced from 20 to 3 business days |
Employer Preparation Checklist
| Action | Why It Matters |
|---|---|
| Review your payroll software (e.g. The Access Group) for Payday Super readiness | Ensure real-time SG calculation, STP reporting, and SuperStream compliance |
| Transition off the SBSCH before 1 July 2026 | The ATO clearing house is closing — move to a commercial clearing house |
| Map pay codes to Qualifying Earnings (QE) | QE replaces OTE; incorrect mapping risks SGC penalties |
| Forecast cash flow for per-pay-cycle super | The quarterly "super float" disappears — funds must be available every payday |
| Audit employee onboarding processes | Ensure Choice of Fund forms and stapled fund checks are completed promptly |
| Run test pay cycles before go-live | Identify software, clearing house, or fund-level issues before penalties apply |
| Brief your finance and HR teams | Payday Super affects payroll, cash flow, compliance, and governance |
Helpful Resources for Employers
| Resource | Link |
|---|---|
| ATO – Payday Super Hub | ato.gov.au/payday-super |
| ATO – Payday Super Fact Sheet (PDF) | Download |
| ATO – Payday Super Legislation Detail | ato.gov.au |
| Fair Work Ombudsman – Payday Super | fairwork.gov.au |
| Australian Retirement Trust – Employer Guide | australianretirementtrust.com.au |
| AustralianSuper – Employer Payday Super | australiansuper.com |
| PwC – Payday Super Preparedness | pwc.com.au |
| The Access Group – AU Payroll & Super | theaccessgroup.com/en-au |
| ATO – Payday Super Working Group | ato.gov.au |
Core Employer Terms
| Term | Explanation | Link |
|---|---|---|
| Superannuation Guarantee (SG) | The minimum percentage of an employee's earnings an employer must contribute to super. Currently 12% of OTE (from 1 July 2025). | ATO – SG for Employers |
| Ordinary Time Earnings (OTE) | The current earnings base for calculating SG — includes regular hours, commissions, some allowances, and paid leave. Being replaced by Qualifying Earnings under Payday Super. | ATO – How Much Super to Pay |
| Qualifying Earnings (QE) | The new term replacing OTE from 1 July 2026. QE includes OTE, salary sacrifice contributions, and other amounts currently included in wages for SG purposes. Employers must map existing pay codes to the new QE definition. | ATO – About Payday Super |
| Qualifying Earnings Day (QE Day) | The payday on which qualifying earnings are paid — this is the date from which the 7-business-day clock starts for super to reach the employee's fund. | AustralianSuper – Payday Super |
| 7 Business Day Rule | Super contributions must be received by the employee's super fund within 7 business days of payday. A 20-business-day extension applies for new employees. | Fair Work – Payday Super |
| Maximum Contribution Base (MCB) | The earnings ceiling above which employers don't have to pay SG. Under Payday Super this will be annualised rather than quarterly — important for high-income employees. | ATO – How Much Super to Pay |
| Salary Sacrifice | An arrangement where an employee directs a portion of pre-tax salary into super. Under Payday Super, salary sacrifice amounts form part of Qualifying Earnings. | ATO – Salary Sacrifice |
Penalties & Compliance
| Term | Explanation | Link |
|---|---|---|
| Super Guarantee Charge (SGC) | A non-tax-deductible penalty triggered if contributions aren't received by the fund within 7 business days of payday. Includes the SG shortfall, notional earnings, and an administrative uplift based on compliance history. | ATO – SGC |
| Administrative Uplift | A new component of the SGC under Payday Super that varies based on the employer's history of meeting SG obligations. Can be reduced through voluntary disclosure. | ATO – About Payday Super |
| SGC Penalties | Under Payday Super, penalties are 25% or 50% of the unpaid SGC (depending on prior penalty history), replacing the previous maximum of 200%. | ATO – About Payday Super |
Payroll Systems & Payment Infrastructure
| Term | Explanation | Link |
|---|---|---|
| Single Touch Payroll (STP) | The ATO's real-time payroll reporting system. Employers report wages, tax, and super digitally each pay run. Under Payday Super, both QE and super liability must be reported through STP. | ATO – STP |
| SuperStream | The mandatory electronic standard for making super payments. All employer super contributions must be processed through SuperStream-compliant channels. | ATO – SuperStream |
| Clearing House | A service that lets employers make a single super payment and have it distributed to multiple super funds for different employees. Essential for managing the increased payment frequency under Payday Super. | ATO – How to Pay Super |
| Small Business Super Clearing House (SBSCH) | The ATO's free clearing house for small businesses. Stopped accepting new users on 1 Oct 2025 and closes permanently on 1 July 2026. All users must transition to a commercial alternative. | ATO – SBSCH |
| New Payments Platform (NPP) | Australia's real-time payments infrastructure. Enables near-instant super payments to funds, helping employers meet the 7-business-day deadline. | NPP Australia |
| Fund Validation Service (FVS) | An ATO service that validates super fund details before payment. Under Payday Super, improvements will give employers early notice of fund changes (e.g. mergers) that could cause bounced payments. | ATO – FVS |
| Member Verification Request (MVR) | A new check under Payday Super allowing employers to verify an employee is a member of a fund and that the fund can accept contributions before making a payment. Required for first-time contributions and fund changes. | ATO – SuperStream Changes |
| The Access Group | A major payroll and business software provider operating in Australia (and globally). Offers cloud-based payroll, STP reporting, super processing, and outsourced payroll services to help employers stay compliant with Payday Super obligations. | The Access Group AU |
Employee Onboarding & Fund Choice
| Term | Explanation | Link |
|---|---|---|
| Choice of Fund | Employees have the right to choose which complying super fund receives their employer contributions. Employers must provide a Standard Choice Form to new employees. | ATO – Choice of Fund |
| Stapled Super Fund | An existing super fund is linked ("stapled") to an employee. If a new employee doesn't nominate a fund, employers must request the stapled fund details from the ATO before defaulting to a MySuper product. | ATO – Stapled Super |
| MySuper | A simple, low-cost default super product. If an employee doesn't choose a fund and no stapled fund exists, the employer must use their default MySuper product. | APRA – MySuper |
| 20 Business Day Extension | For new employees, employers have 20 business days (from the day after the first payday) for the super fund to receive the first contribution — instead of the standard 7 days. | New Employee Extension |
| Bounced / Rejected Contributions | Contributions returned by a fund (e.g. wrong details, closed account). Employers must identify the return, correct the issue, and resubmit promptly. An extended timeframe may apply. | ATO – About Payday Super |
Contribution Caps Employers Should Know
| Term | Explanation | Link |
|---|---|---|
| Concessional Contributions Cap | The annual limit on before-tax super contributions (employer SG + salary sacrifice + personal deductible). $30,000/year for 2025–26. Excess triggers additional tax for the employee. | ATO – Concessional Cap |
| Non-Concessional Contributions Cap | The annual limit on after-tax contributions. $120,000/year (or up to $360,000 under the bring-forward rule). Nil if total super balance ≥ $2 million. | ATO – Non-Concessional Cap |
| Division 293 Tax | An additional 15% tax on concessional contributions for employees whose income + concessional contributions exceed $250,000. Employers should be aware for salary-packaging discussions. | ATO – Division 293 |
Key Regulators
| Body | Role | Link |
|---|---|---|
| ATO | Administers SG, Payday Super, STP, SuperStream, and compliance enforcement. Your primary point of contact for super obligations. | ato.gov.au |
| Fair Work Ombudsman | Enforces workplace laws including employer obligations around super. Late super may also breach the Fair Work Act or applicable awards. | fairwork.gov.au |
| APRA | Australian Prudential Regulation Authority — oversees the financial soundness of super funds (excluding SMSFs). | apra.gov.au |
| ASIC | Australian Securities and Investments Commission — regulates financial services licensing and disclosure for super funds. | asic.gov.au |
| AFCA | Australian Financial Complaints Authority — handles disputes between businesses/individuals and financial firms, including super-related complaints. | afca.org.au |
Last updated: February 2026. Always verify current rates and thresholds with the ATO. This glossary is general information only — not financial, legal, or tax advice.