Getting Ready for 1st July 2026
Payday super changes start 1 July 26. The Superannuation Guarantee (SG) moves from a “pay it quarterly” mindset to a pay-cycle mindset. Employers will need to pay super around the same time as wages, so the cash arrives in the employee’s fund within 7 business days of payday (with limited exceptions).
Why?
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The driver is to reduce unpaid/late SG and get contributions into funds earlier.
New terminology, in plain English
The legislation introduces new terms. Practically, they’re a relabel around old concepts.
Qualifying earnings (QE) is the new label for the payments used to calculate SG under payday super (broadly aligned to ordinary-time-earnings type concepts.
A QE day is the day you pay qualifying earnings to your employee (the pay date).
That definition matters because QE day triggers:
- The calculation of the SG obligation, and
- The start of the “on-time” window.
If you pay your staff before their pay date, the QE day is the date you pay them. So, if you pay your team early on a Wednesday for potential delays, the QE date is Wednesday.
The individual SG amount is the SG required for that employee for that QE day:
Individual SG amount = QE × 12%
A contribution is considered on time if it is received by the fund (and can be allocated) within 7 business days after the QE day. There are longer rules in certain cases, including up to 20 business days for a new employee’s first contribution (and similar timing relief for some fund-change situations).
How the Payday Super Framework Operates
- Payroll is processed and wages are paid → that payday is the employee’s QE day.
- Payroll calculates the individual SG amount (QE × 12%).
- Employer must ensure the contribution arrives in the fund within the required timeframe (usually 7 business days).
- If paid in full and on time → no issue.
- If late/short → SG charge risk arises, calculated under the “new SGC” rules (below).
The "New SGC"
- The unpaid/late SG shortfall (after taking account of late contributions)
- Notional earnings (interest) on the late amount
- An administrative uplift amount, which is initially 60% of the total final shortfalls plus notional earnings for the QE day.
Even if you later “catch up” the super, the fact it was late can still leave a charge outcome (particularly notional earnings + uplift), depending on how the rules apply and whether reductions are available in your circumstances.
Managing June 26 contributions
The last quarter under the old quarterly payment is 1 April 2026 to 30 June 2026, and the standard SG due date for that quarter remains 28 July.
From 1 July 2026, payday super applies.
One practical “gotcha”: payday super is anchored to QE day (the pay date). So if a pay cycle crosses the start date (e.g., wages paid on 1 July 2026 for work performed in late June), the payday super timing rules will generally be triggered because the QE day is after 1 July 2026.
That’s why June/July 2026 payroll calendars need a dry run well before go-live.
Further, if workers are planning for a $30k super contribution for 26, and a 27 super contribution for 27, focus on the numbers for those people. If you routinely pay the super once a quarter, and you now pay Q1 27 on time, that worker might exceed their contribution.
What Xero (and others) will do to Make this Workable
The reform only works if technology automates the mechanics. Xero has already published that it is positioning for the change. In practice, you should expect Xero to assist by:
- Identifying the QE day per pay run,
- Calculating SG as 12% of QE at employee level,
- Prompting/producing the payment workflow each pay cycle (rather than monthly/quarterly batches), and
- Flagging exceptions (new starters, fund changes, rejected payments) so you can fix them inside the 7-business-day window.
And it won’t just be Xero. The same functional requirements should apply across the mainstream ecosystem—QuickBooks, Dynamics NAV / Business Central, KeyPay, MYOB and so forth.
The SBSCH is going away
The SBSCH is going away from 30 June 2026.
That makes software selection a genuine project for SBSCH users. With the end of the SBSCH on, affected employers will need to review their current payroll and superannuation processes and transition to an alternative compliant solution.
A small increase in the superannuation base
Previously, when a worker salary sacrificed their wage into superannuation, the Super Guarantee Levy was then calculated on the lower salary (ignoring the superannuation sacrificed).
The base now requires the 12% superannuation calculation to be factored on the workers wage plus any salary sacrificed amounts.
Who is the Most Affected?
The biggest impact is the employer who engages a finance person once a quarter. Classically, even with Single Touch Payroll, that person would process pays, file the STP, prepare BAS, calculate super and pay the BAS/super quarterly.
This process does not work now. Super must be calculated and paid with the workers. Taxation is a yearlong process – not just an annual event.
Further, payments to shareholder employees are covered. So making sure your own house is in order is critical.
What to do now:
- Run a “day-in-the-life” test: pay run → super batch → confirmation that funds are received/allocable within the timeframe.
- Identify workers who are salary sacrificing the maximum $30k contributions in 26 and plan to model your payments so their super funds receive the $30k contribution in 26 and (where relevant) receive the $32,500 in 27.
- Map your pay calendar and cashflow around June/July 2026.
- Plan for the SBSCH closure.
How Westcourt can help
Like all software, the structuring and setup is critical to automating the process. Westcourt is a leading-edge advice firm with technology and automation as a Xero Platinum and Quickbooks ProAdvisor firm (among others) and we can make sure your payroll function is structured and ready for automation from start to finish. Given our knowledge, experience and commitment to private business – why not give us a call?
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