Payday Super is live. This is what changes.
From 1 July 2026, super must be paid at the same time as wages. Every pay run. Contributions must reach your employee’s super fund within seven business days of each payday.
That’s the rule. But let’s talk about what it actually means for your business.
Your cash flow has changed permanently
Under the old system, super was effectively an interest-free loan from your employees. You accumulated the liability over three months, then cleared it in a lump sum four times a year.
That buffer is gone.
Super is now a same-day cost of employing someone. Pay your team on Friday, super goes out on Friday. Weekly payroll means weekly super. Fortnightly means fortnightly. The rate hasn’t changed. The rhythm has.
Most businesses have been told Payday Super is coming. Fewer have actually updated their cash flow model to reflect what that looks like week to week. If yours hasn’t been updated, do it before you run your first payroll in July.
The penalty regime is stricter than the old one
Under the old quarterly system, there was some room to move. You could lodge a late payment and minimise the Super Guarantee Charge with a voluntary disclosure.
Under Payday Super, the ATO issues a Super Guarantee Charge for each individual missed or late pay event. There is no late payment offset. Miss a payday, get a charge. The compliance bar has shifted significantly, and it applies from day one of the new financial year, not after a grace period.
What else has changed alongside the frequency
- Qualifying earnings replace ordinary time earnings. The base on which you calculate super contributions has broadened. Your payroll software should handle this automatically – but confirm it is set up correctly before your first July pay run, not after.
- STP reporting is different. From 1 July 2026, qualifying earnings and super liability must be reported through Single Touch Payroll alongside each pay event. If your STP setup hasn’t been updated for the new requirements, get that sorted now.
- Super fund connections matter more. Because contributions need to reach the fund within seven business days, any super fund that’s slow to process or incorrectly set up becomes a compliance risk. Check that every employee’s super fund details are current and connected correctly in Xero.
The SBSCH is gone. Stop using it!
The ATO’s Small Business Super Clearing House cannot be used for any super payments on or after 1 July 2026.
If you have been relying on the SBSCH to pay your employees’ super, you need a compliant alternative in place before your first July payroll. That means now!
This is the most common gap we’re seeing among small businesses heading into FY27. If you’re not sure what to switch to, talk to your bookkeeper or payroll provider today. Your Xero setup should have a clearing house or direct fund payment method that meets the new requirements – if it doesn’t, that needs to be fixed urgently.
One more Payday Super detail: FY26 Q4 super is still on the old rules
Your final quarterly super payment (wages paid up to 30 June 2026) is still due on 28 July 2026 under the old system.
Pay that. Then Payday Super applies to everything from 1 July onwards.
The shift to Payday Super changes how super is reported through STP. If your FY26 year-to-date figures include any Payday Super reporting from July (perhaps from a test payroll or an early transition), check carefully that your FY26 finalisation reflects only FY26 data.
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STP finalisation: due 14 July
While you’re in payroll mode, there is one more task left over from FY26 that cannot be skipped.
STP finalisation must be completed by 14 July 2026. This is how you confirm your employees’ income and super figures for the year so they can lodge their tax returns via myGov. It used to be a payment summary. Now it’s done entirely through Single Touch Payroll in Xero.
How to do it
- In Xero, go to Payroll > Single Touch Payroll.
- Review year-to-date totals for each employee against what you’ve actually paid. If anything doesn’t reconcile, fix it before you submit, not after.
- Submit the finalisation to the ATO through Xero.
- Employees will see “Tax ready” in their myGov account once it’s processed.
Why this year’s reconciliation needs extra attention
The shift to Payday Super changes how super is reported through STP. If your FY26 year-to-date figures include any Payday Super reporting from July (perhaps from a test payroll or an early transition), check carefully that your FY26 finalisation reflects only FY26 data.
If your STP isn’t reconciling cleanly, deal with it now. The ATO sees everything you submit, and discrepancies between your STP data and your actual payroll are a flag. If you have a bookkeeper managing your payroll (like us!), your STP finalisation will be taken care of as part of our EOFY checks. Not sure if it’s covered in your arrangement? Just ask.
Minimum wage: up 4.75% from 1 July
The national minimum wage increases 4.75% to $1,004.90 per week ($26.44 per hour), effective from the first full pay period on or after 1 July 2026. First time it’s broken the $1,000/week mark.
Modern award rates are up 4.75% by the same date.
If anyone on your team is paid at or near the minimum or a modern award rate, update their pay before their first full July pay period. Late or underpaid wages are a Fair Work compliance issue – not just a bookkeeping one. Not sure which award applies? Check the Fair Work Pay and Conditions Tool or ask your bookkeeper.
Super guarantee rate: still 12%
The super guarantee rate holds at 12% for FY27. Same as FY26. This is the final legislated rate – no further scheduled increases.
What has changed is everything around it: the frequency, the reporting, the clearing house requirements, the penalty structure. The rate is the one thing staying still while everything else moves.
Instant asset write-off: now permanent
The $20,000 instant asset write-off is permanent from 1 July 2026 for businesses with annual turnover under $10 million. No longer a temporary measure renewed each budget – eligible assets under $20,000 can be immediately deducted without checking each year whether the concession is still in place. Confirm eligibility with your accountant before claiming.
Income tax: a small bracket cut
The second marginal tax bracket drops from 16% to 15% on income between $18,201 and $45,000 from 1 July 2026. Modest saving, around $268 per year for anyone earning above $45,000. PAYG withholding tables have been updated. Confirm your payroll software has applied the FY27 tax tables before your first July pay run.
Your FY27 first-week checklist
Before you run your first payroll of the new financial year:
- SBSCH: Stop using it. Make sure your clearing house or super fund payment method is Payday Super-compliant.
- Super payment frequency: Updated in Xero to pay super with every pay run, reaching the fund within seven business days.
- Super fund details: Every employee’s fund details current and connected correctly in Xero.
- STP for Payday Super: Qualifying earnings reporting configured and active.
- STP finalisation (FY26): Submitted by 14 July 2026.
- Q4 FY26 super: Paid by 28 July 2026 under the old quarterly rules (last one!)
- Minimum wage and award rates: Any employees at or near minimum or award rate updated before first full July pay period.
- PAYG withholding: FY27 tax tables applied in your payroll software.
Payday Super is not a small change with a bit of setup. It is a fundamental shift in how employing someone works in Australia. The businesses that treat it that way from day one of FY27 will be fine. The ones that find out the hard way in October will have a much harder conversation with the ATO.
If you want to make sure your payroll setup is ready before July gets away from you, we can help.
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