Paying super in Australia, who, what and when for employers

If you pay people to work for your business in Australia, the short answer is almost always yes: you must pay superannuation (super) on top of their wages. The obligation is called the superannuation guarantee (SG), and since 1 July 2026 it has run on a much faster cycle than most employers are used to. Under the new Payday Super rules, each employee's super must be sitting in their fund within 7 business days of every payday, not once a quarter.

Getting it wrong is expensive. If contributions are late or short, the Australian Taxation Office (ATO) can assess you for the superannuation guarantee charge (SGC), which layers daily interest, an enforcement uplift and penalties on top of the contributions you missed. The ATO also data-matches your Single Touch Payroll (STP) reporting against what super funds actually receive. This guide sets out who you must pay super for, what you pay it on, when and how it must be paid, and what happens if it is late.

Who you must pay super for

The starting point is that everyone who is an employee under the Superannuation Guarantee (Administration) Act 1992 (Cth) (the SGAA) must be paid SG. The Act deliberately reaches wider than the Fair Work definition of employee, so run through this list rather than assuming someone is exempt:

• Employees aged 18 and over: full-time, part-time and casual staff all qualify, regardless of how many hours they work or how little they earn. There is no minimum earnings threshold; the old $450-a-month rule was abolished for quarters starting on or after 1 July 2022 by the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2022 (Cth).
• Employees under 18: you only have to pay SG for a week in which they work more than 30 hours. The hours are the actual hours worked in that week; the ATO makes clear you cannot average hours across a fortnight or month. This mirrors s 28 of the SGAA, which excludes the earnings of under-18 part-time employees.
• Contractors paid mainly for their labour: under s 12(3) of the SGAA, a person who works under a contract that is wholly or principally for their labour is treated as an employee for super purposes. An ABN and regular invoices do not change this. If they personally perform the work and are paid for their time and effort rather than for a result or substantial materials and equipment, budget for SG on the labour component of their invoice. This is the trap that catches most small businesses.
• Directors: a director who is paid for performing the duties of the role is an employee under s 12(2) of the SGAA, so directors' fees and remuneration attract SG.
• Family members: a spouse, child or relative who works in your business is treated like any other employee if they are paid for their work.
• Domestic or private workers: a nanny, housekeeper or carer engaged to work at your home rather than for your business only attracts SG if they work more than 30 hours in a week. Under s 12(11) and s 11(2) of the SGAA, under that threshold no SG is required.
• Temporary residents: visa status does not matter. A backpacker or working holiday maker doing work in Australia is eligible for SG like anyone else.
• Performers and sportspeople: people paid for performing, presenting, playing sport or providing services for filming fall within the extended employee definition in s 12(8) of the SGAA.

You do not have to pay SG for yourself if you are self-employed, for a non-resident employee performing work entirely outside Australia, for armed forces reservists in respect of reserve service, or for a high-income earner who holds a valid employer shortfall exemption certificate under s 19AB of the SGAA. And paying wages in cash changes nothing: SG applies to the earnings regardless of how the money changes hands.

How much you must pay: 12% of qualifying earnings

The SG rate has been 12% since 1 July 2025, and it stays at 12% under Payday Super. For reference, it was 11.5% in 2024-25, 11% in 2023-24 and 10.5% in 2022-23, per the ATO's rate table.

Since 1 July 2026 you calculate SG on an employee's qualifying earnings. This is a new term that the ATO describes as bringing together ordinary time earnings and other payments. For most employers the total does not change from the old ordinary time earnings (OTE) base; the main difference is that all commissions now count, including commissions paid solely for work done outside ordinary hours. Qualifying earnings also include salary sacrifice amounts that would otherwise have been paid to the employee.

In practice, qualifying earnings include:

• pay for ordinary hours of work, including casual loading, shift penalties and piece rates
• most allowances paid in respect of ordinary hours, such as task and on-call allowances
• most bonuses, including performance, Christmas, sign-on and referral bonuses
• paid leave such as annual leave, long service leave and rostered days off taken at ordinary rates
• payment in lieu of notice on termination
• all commissions
• salary sacrificed amounts.

They do not include:

• overtime payments, provided the employee's ordinary hours are clearly identified in an award or agreement (if they are not, all hours worked count as ordinary hours)
• reimbursements for expenses actually incurred
• fringe benefits
• unused annual leave and long service leave paid out on termination, redundancy and ex-gratia payments, and other termination payments of that kind
• employer-paid parental leave
• bonuses paid solely for work done entirely outside ordinary hours.

There is also a maximum contribution base. For 2026-27 it is $270,830 a year, and once your payments of qualifying earnings to an employee reach that cap you can stop paying the minimum SG for them for the rest of the financial year. Under the old quarterly system the cap was a quarterly figure, $62,500 per quarter in 2025-26.

When you must pay: within 7 business days of payday

This is the biggest change under Payday Super. From 1 July 2026, your SG contribution is on time only if it is received by the employee's super fund, with enough information to allocate it to their member account, within 7 business days after the day you pay them. That payday is called the qualifying earnings day, or QE day. The ATO recommends paying the super on payday itself, which is also the safest way to meet the deadline.

A business day excludes weekends and any day that is a public holiday for the whole of a state or territory, even if you are not in that state. There are several situations where you get longer:

• New employees and new funds: the first contribution for a new employee, or to a new fund for an existing employee, can be received within 20 business days of the relevant payday.
• Out-of-cycle payments: a bonus or payment made outside the regular pay cycle is treated as made on the next regular payday, so its super is due with that payday's contribution.
• Exceptional circumstances: the ATO can extend deadlines where natural disasters or widespread IT outages affect a class of employers.
• Bunching rule: where an extended due date falls after the next payday's due date, both contributions fall due on the extended date.

The quarterly dates that most employers know, 28 October, 28 January, 28 April and 28 July, only applied to pay periods up to 30 June 2026. The final quarterly payment, for the April to June 2026 quarter, was due on 28 July 2026. From 1 July 2026 the clock restarts at every pay run.

Where you pay: choice of fund, stapled funds and SuperStream

Super must be paid into the right fund, and getting this wrong has its own cost. When an employee starts, you must give them a standard choice form within 28 days so they can nominate any eligible choice fund, per s 32N of the SGAA. If they do not choose a fund, you must request their stapled super fund details from the ATO under s 32R; this is the fund already linked to them. Since 27 March 2026 you can request the stapled fund details and offer them to the employee at the same time as the choice form. Only where no stapled fund exists should you fall back to your default fund.

Failing to follow the choice of fund rules adds a choice loading of 25% of the value of the contributions to your SGC, capped at $1,200 per notice period per employee.

All payments must go through SuperStream, the electronic data and payment standard, usually via your payroll software or clearing house. From 1 July 2026 the New Payments Platform allows near-real-time transfers, and super funds have 3 business days to allocate contributions to member accounts. You must also report both qualifying earnings and the super liability through Single Touch Payroll, so your STP figures should reconcile exactly with what the funds receive.

Keep the records behind these calculations for at least five years. Section 79(4) of the SGAA requires employers to retain records of their super transactions until the end of 5 years after they were prepared, and failing to keep them is an offence.

What happens if you pay late: the superannuation guarantee charge

If you miss a 7-business-day deadline, you are liable for the SGC. Under Payday Super the ATO assesses the charge itself for each payday; you no longer lodge a superannuation guarantee statement. The charge has four components:

• The unpaid shortfall: the 12% contributions still outstanding for the payday.
• Notional earnings: interest on the shortfall calculated at the general interest charge rate, compounded daily.
• An administrative uplift amount: initially 60% of the shortfall and notional earnings combined, reflecting the cost of enforcement.
• Choice loading: the 25% loading described above, if the choice of fund rules were not followed.

The administrative uplift can be reduced, potentially to nil. It drops by 20 percentage points if the ATO has not assessed you for SGC in the previous 2 years, and by up to a further 40 percentage points if you lodge a voluntary disclosure statement before being assessed. Making up the late contribution to the fund before you are assessed also reduces the shortfall component, though interest and the uplift can still apply.

Two points about the cost of the charge are worth flagging. First, unlike the old regime, an SGC relating to paydays from 1 July 2026 is tax deductible, including the uplift and choice loading components. The general interest charge on an unpaid SGC and any late payment penalty are not deductible, and SGC for quarterly periods before 1 July 2026 remains non-deductible. Second, penalties for non-payment are 25% or 50% of the unpaid charge depending on whether you have prior penalties, and if you do not pay an assessment within 28 days the ATO issues a Notice to Pay, with a further late payment penalty if that is ignored.

The ATO has signalled a supportive first year: under its published compliance approach it will not review employers who pay super for each payday and fix errors quickly, and it will concentrate on employers who are not paying at all. That goodwill is not an excuse to be slow, but it rewards businesses that build the habit now.

A compliance checklist for your next pay cycle

Run through these checks every pay cycle:

• Confirm who is eligible: run every worker through the list in this article, including contractors paid mainly for their labour and directors.
• Calculate qualifying earnings correctly: pay particular attention to commissions, bonuses, allowances and salary sacrifice, and make sure overtime is genuinely identifiable under an award or agreement.
• Pay on payday: schedule the super payment with the pay run so it is received within 7 business days, and allow for clearing house processing time.
• Get choice right: issue the choice form within 28 days, check stapled funds when no choice is made, and never pay to your default fund without doing that check.
• Use SuperStream: pay electronically with the data required to allocate contributions, and confirm funds received and allocated the payment.
• Reconcile STP: make sure the qualifying earnings and super liability you report match what the fund received.
• Keep records for five years: choice forms, stapled fund responses, calculations and payment confirmations.
• Review edge cases quarterly: before each BAS or year end, spot-check bonuses, allowances, termination payments and leave payouts against the qualifying earnings rules.

Where a lawyer helps

Most super problems start before payroll is even touched: in how roles are structured and described. A practitioner can review whether your contractors are genuinely independent or caught by s 12(3), check that employment contracts and awards state ordinary hours clearly enough for overtime to be excluded from qualifying earnings, and confirm how termination payments, bonuses and allowances should be treated. If the ATO has issued an SGC assessment, a lawyer can help with voluntary disclosure, objections under Part IVC of the Taxation Administration Act 1953, and negotiating payment arrangements. For cross-border teams, certificates of coverage under international social security agreements and the rules for non-resident employees working overseas are areas where tailored advice is worth the cost.

The 7-business-day clock is the trap that costs the most

The single change most likely to catch Australian employers is the death of the quarterly rhythm. Businesses that have paid super four times a year for a decade now owe it within 7 business days of every payday, and the old habit of dealing with super on 28 October, 28 January, 28 April and 28 July will produce a string of SGC assessments, each carrying daily interest and an uplift on top. The first action to take this week is simple: open your payroll calendar, check whether the super for your last payday was received by the fund inside the 7-business-day window, and if you run contractors, ask yourself whether they personally perform the work and are paid mainly for their labour. Answering those two questions correctly now is cheaper than any remediation the ATO will offer you later.