The Australian superannuation guarantee regime is undergoing its most significant structural change since its inception in 1992. As advised in our previous article here, from 1 July 2026, the current quarterly Superannuation Guarantee (SG) system will be retired in favour of Payday Super. The aim is to reduce unpaid super to employees by aligning the SG payments with their payroll cycles. For healthcare providers and practice owners, this will have a large impact on their payroll and cash flow management.
What is Payday Super?
In general terms, Payday Super requires employers to pay their staff’s superannuation at the same time they pay their salary and wages. SG payments must be received by the employee’s super fund within seven business days of payday.
From 1 July 2026, Ordinary Time Earnings will be replaced by a broader concept called Qualifying Earnings, the new base used to calculate both the 12% SG and any late-payment penalties. It includes Ordinary Time Earnings and explicitly adds in salary-sacrificed amounts and all commission paid to employees. Contractors who are paid mainly for their labour will fall under the expanded definition of employee as they do in the current quarterly SG system.
Who will it impact?
This reform impacts all medical practices that employ staff, irrespective of the payroll frequency.
Why it is important
- Moving from four large quarterly payments to more regular and frequent payments will require cash flow to be closely monitored.
- Payroll systems and clearing-house arrangements will need to be updated.
- The Australian Taxation Office’s (ATO) increased visibility with Single Touch Payroll means late payments will be flagged automatically.
What needs to be done now
- Check with the payroll software providers to ensure they are ready to report both Qualifying Earnings and SG liabilities from 1 July 2026.
- Adjust cash flow forecasts to align the super outlays with regular pay periods instead of quarterly payments.
- If using the Small Business Superannuation Clearing House (SBSCH), the ATO recommends making the last payment for the January–March 2026 quarter (due 28 April 2026). As SBSCH closes on 1 July 2026, employers must transition to a commercial clearing house or payroll-integrated solution before then.
To help reduce compliance risks, we recommend planning for the change as early as possible. This will ensure that payroll operations are in order well before the 1 July 2026 deadline.
Contact Pilot
If you would like our assistance in reviewing your payroll systems or business planning ahead of the new regime, please contact Kristy Baxter or Angela Stavropoulos on taxmed@pilotpartners.com.au or (07) 3023 1300.