RA Business Advisors

Payday

Payday Super is coming: what small businesses need to know about Qualifying Earnings

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If you run a small or medium business in Australia, payroll compliance is about to change again. From 1 July 2026, employers will be required to pay superannuation on payday, not quarterly. This reform known as Payday Super is designed to improve employee outcomes, but it also means tighter processes and less room for error for business owners and admin teams. 

As accountants who specialise heavily in business payroll and compliance, we’re ready to help clients prepare.  

 

What is Payday Super, in plain English? 

Under the current system, most employers calculate and pay superannuation quarterly. Payday Super changes that rhythm. Instead, super will be calculated and paid in line with each pay cycle—weekly, fortnightly, or monthly—through upgraded SuperStream processes. 

This means super obligations will become part of your regular payroll workflow, not a separate quarterly task. From our experience, businesses that rely on manual workarounds or loosely defined pay items will feel this change the most. 

 

Qualifying Earnings (QE): the new term you need to understand 

Qualifying Earnings (QE) is the new base used to calculate Super Guarantee (SG) contributions under Payday Super. 

In simple terms, QE represents the earnings that super is calculated on each pay run, rather than being reviewed in arrears at the end of a quarter. The SG amount will be calculated as 12% of qualifying earnings, paid at the same time as wages. 

According to the Australian Taxation Office, QE closely aligns with what is currently considered salary or wages for super purposes—but the difference is timing and visibility. Errors will surface immediately, not months later. 

From a compliance perspective, this makes payroll accuracy more important than ever. 

 

What payments are included in Qualifying Earnings? 

While the legislation is still being finalised, the ATO has clarified that QE will generally include: 

  • Ordinary time earnings (OTE) 
  • Base salary and wages 
  • Allowances that are considered part of salary or wages 
  • Salary sacrifice amounts paid to super 

What matters most is how your payroll system classifies pay items. We often see issues where allowances, bonuses, or leave types are inconsistently set up. Under Payday Super, these misclassifications can lead to underpaid super on every pay cycle—not just once a quarter. 

The calculation itself isn’t complicated. Getting the data right is. 

 

What this means for payroll and cashflow 

From a practical standpoint, Payday Super has two major implications: 

  1. Cashflow timing changes
    Super will no longer be held and paid quarterly. Businesses will need to ensure sufficient cash is available at each pay run. This doesn’t increase the total cost of super—but it does change when the cash leaves your account.
  2. Payroll processes must be tighter
    With super calculated every pay cycle, there’s less room for manual fixes. Payroll systems need to be set up correctly, staff need clear processes, and reporting needs to be consistent.

For many businesses, this is where professional support makes a real difference. 

 

A practical Payday Super readiness checklist 

Based on what we’re doing with clients right now, here’s how we recommend preparing: 

  1. Review all payroll pay items and map them correctly to qualifying earnings 
  1. Confirm your payroll software will support Payday Super and SuperStream changes 
  1. Update cashflow forecasts to reflect pay-cycle super payments 
  1. Run test pay runs to confirm QE calculations and SG amounts 
  1. Document payroll processes so admin staff can apply them consistently 

The ATO has released employer resources, including checklists and fact sheets, but implementation is where most businesses need help. 

 

How we help 

Payroll and super compliance is a core part of our accounting practice. We work closely with businesses to review payroll setups, correct pay item classifications, and build processes that scale as your business grows. 

If you’d like us to review your payroll and help you prepare for Payday Super well before 1 July 2026, we’d be happy to help. Getting this right early puts you in control rather than scrambling later. 

Get in touch with our team to book a Payday Super readiness review.

 

Payday Super is Coming: What Small Business Owners Must Do to Stay Compliant in 2026

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As an accountant who works closely with small and medium-sized businesses every day, I understand how challenging it can be to keep up with changing legislation — especially when it comes to payroll and superannuation compliance. And now, there’s another big change on the horizon: Payday Super.

The Australian Government recently confirmed that, starting from 1 July 2026, employers will need to pay their employees’ super at the same time as wages. This change is being introduced to close the multi-billion dollar unpaid super gap and ensure employees receive their super entitlements promptly.

But for many small businesses, this shift is more than just a compliance tweak — it could mean major changes to how you manage your cash flow, payroll systems, and reporting processes.

What Is Payday Super and Why Is It Changing?

Right now, most businesses pay super guarantee (SG) contributions on a quarterly basis. For many of our clients, this works well — it’s predictable, easier to manage cash flow, and allows time to catch and fix errors.

But from 1 July 2026, that will change. The new system will require employers to pay SG on or before payday. The rationale behind this is understandable: the ATO wants to crack down on unpaid super and ensure that employees aren’t missing out on their retirement savings.

While the intent is positive, the implementation will create added pressure on small businesses that aren’t well-equipped to handle frequent super payments.

What This Means for Small Business Employers

This change could have a significant impact on how your business operates:

  • Cash Flow Pressure: Instead of setting aside super for quarterly payments, you’ll need to have it ready for every single pay run.
  • Payroll Software Readiness: If you’re still using manual spreadsheets or outdated systems, they won’t cut it in the new world of real-time SG payments.
  • Admin & Compliance Burden: There’ll be a greater demand for accurate, timely processing.
  • ATO Penalties: The ATO will have greater visibility through STP, making it easier to detect errors or delays.

Quick Checklist:

  • Are you using up-to-date, cloud-based payroll software?
  • Do you regularly reconcile wages and super in real-time?
  • Do your admin or payroll staff know what the 2026 changes mean?
  • Have you reviewed your cash flow cycles to account for more frequent outflows?

How to Prepare Now (and Avoid Stress in 2026)

The good news is that there’s still time to prepare — but you don’t want to leave it until the last minute.

Here’s what I recommend as a proactive accountant working in this space every day:

  • Upgrade Your Payroll Software: Tools like Xero, MYOB, or QuickBooks can automate SG payments and integrate with STP.
  • Conduct a Payroll Health Check: Review how you’re managing payroll and identify gaps.
  • Review Your Cash Flow: Adjust your payroll calendar and budgeting to account for frequent payments.
  • Train Your Admin Team: Everyone involved in payroll should understand the new rules.
  • Get Expert Support: We specialise in helping small businesses stay compliant with less stress.

Our Perspective as Payroll & Super Experts

At our firm, we specialise in supporting small and medium businesses across a wide range of industries — and payroll compliance is one of our core strengths.

We know that many business owners don’t have the time or resources to deep-dive into legislative changes. That’s where we step in. From helping you modernise your systems to training your staff and ensuring you’re ATO-ready, our job is to make sure you stay compliant without adding stress to your plate.

📞 Book a Free Business Check-Up

Let’s review your payroll systems, assess your SG compliance, and help you plan for the transition to Payday Super — before it becomes a problem.

👉 Click here to book your free business check-up