Paying superannuation is one of the least negotiable costs of employing staff in Australia. Since 1 July 2026 every private-sector employer must pay at least 12% of each eligible employee's qualifying earnings into a complying super fund, and the contribution must be received by the fund within seven business days of each payday. This is the "Payday Super" regime, and it replaced the old quarterly system.
This guide sets out who you must pay super for, what counts as qualifying earnings, the deadlines that now apply, your choice of fund and reporting duties, and what happens when a payment is late. It reflects the law as at August 2026. It is general information only, not financial or tax advice, and your payroll provider or adviser should confirm how it applies to your business.
Who you must pay super for
The superannuation guarantee applies to a broader group than your "employees" in the everyday sense. Under s 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (the Act), a person who works under a contract that is wholly or principally for their labour is treated as an employee for super purposes, even if they hold an ABN and invoice you. Company directors are also covered.
Use these rules to work out whether a worker is in scope:
- Employees: All full-time, part-time and casual employees are covered. There is no minimum earnings threshold: the old $450-a-month rule was removed from 1 July 2022, so a part-timer earning $100 a month is still entitled to super.
- Workers under 18: Super is generally only required if the worker works 30 hours or more in a week. The same rule applies to domestic or private workers.
- Contractors: A contractor engaged wholly or principally for their labour is an employee for super purposes, whatever the contract calls them. The substance of the arrangement matters: who controls the work, whether the contractor can delegate, who supplies the tools and how they are paid.
- Directors and executives: Fees and remuneration paid to directors and members of a company's executive body attract super.
If you are unsure whether a particular worker is in scope, the ATO's guidance on who you have to pay super for is a useful first check.
What counts as qualifying earnings
From 1 July 2026 super is calculated on a worker's qualifying earnings. For most employees that is their ordinary time earnings (OTE): what they earn for their ordinary hours of work. Qualifying earnings adds a few categories on top, set out in s 10A of the Act:
- all commissions, including commissions paid for work done entirely outside ordinary hours;
- amounts an employee salary sacrifices to super, which count as if they had been paid as cash; and
- payments to contractors under a contract wholly or principally for their labour.
The ATO's list of what payments are qualifying earnings is the practical reference for the detail. The common items break down like this.
What is included
These payments count toward the qualifying earnings base:
- Base salary or wages for ordinary hours, casual loading, shift penalties and piece rates for work done in ordinary hours.
- Most allowances paid in respect of ordinary hours, such as on-call allowances for ordinary hours and task allowances. An allowance that fully compensates for expenses the employee will incur is generally not OTE.
- Paid leave that replaces ordinary hours, including annual leave, personal and carer's leave, and public holidays paid as ordinary hours.
- Most bonuses, including performance bonuses, Christmas bonuses, sign-on and referral bonuses, provided they relate to ordinary hours.
- All commissions, as noted above, including commissions for work done entirely outside ordinary hours.
- Annual leave loading, unless it is clearly linked to a lost opportunity to work overtime.
What is excluded
These payments do not form part of the qualifying earnings base:
- Genuine overtime, provided the employee's ordinary hours are clearly identified in an award, agreement or contract. If ordinary hours cannot be identified, all hours worked are treated as ordinary and attract super.
- Reimbursements of expenses, fringe benefits and overpayments.
- Bonuses paid solely for work done entirely outside ordinary hours.
- Unused annual leave, long service leave and personal leave paid out on termination, regardless of the reason for the termination.
- Genuine redundancy payments and other employment termination payments.
A worked example shows how the pieces fit together. Suppose an employee is paid $2,000 a fortnight for their ordinary hours, earns a $200 commission for a sale made outside ordinary hours, and receives $100 of genuine overtime. The qualifying earnings base is $2,200 (the ordinary wages plus the commission, which counts even though the work was outside ordinary hours) and the overtime is excluded. Super for that payday is 12% of $2,200, or $264.
Payment in lieu of notice is different
One item employers frequently get wrong: payment in lieu of notice is qualifying earnings. If you pay an employee out instead of giving notice, that amount attracts super at 12%. In a redundancy, for example, super is payable on the payment in lieu of notice component but not on the redundancy payment itself. The ATO's termination payments guidance makes the distinction explicit.
When super must be paid: the Payday Super deadlines
Since 1 July 2026 super guarantee contributions must be received by the employee's super fund within seven business days after each payday. Note the word "received": it is not enough to initiate the payment. The fund must have the contribution, with enough information to allocate it to the employee's account, by the deadline. The ATO's payment deadlines page sets out the detail.
Two longer periods are worth knowing about:
- First contribution for a new employee or new fund: the deadline is 20 business days after the payday.
- Out-of-cycle payments: a bonus or one-off payment made between regular paydays can be included with the next regular payday's super, provided that next contribution is on time.
A business day excludes weekends and days that are public holidays anywhere in Australia, so national public holidays effectively extend the window.
If you pay through a clearing house or payroll software, build in their processing time: the seven-business-day clock runs to the fund, not to the clearing house. Note also that the ATO's Small Business Superannuation Clearing House closed on 1 July 2026 as part of the Payday Super reform, so commercial clearing houses and payroll providers are now the standard route for small businesses.
For context, earnings paid up to 30 June 2026 were still governed by the old quarterly rules, with contributions due by 28 January, 28 April, 28 July and 28 October. That means the April to June 2026 quarter was still due on 28 July 2026 under the old system, and payments from 1 July 2026 onwards run on the new per-payday clock. If your payroll is still set to quarterly, it is now out of date.
Choice of fund and stapled funds
Eligible employees can choose the fund their super is paid into, and you must give them that choice. If a new employee does not choose a fund, you must request their "stapled" fund from the ATO under s 32R of the Act and pay contributions into it, which satisfies the choice of fund requirements under s 32C. Keep a copy of the employee's choice form, your stapled fund request and the ATO's response. If you pay super into the wrong fund, you face a "choice loading" as part of the super guarantee charge, discussed below.
Reporting and record keeping
Single Touch Payroll (STP) reporting continues under Payday Super. Each pay cycle you report salary or wages and super information to the ATO, so your STP data should reflect the qualifying earnings base, any salary-sacrificed super and the fund details for each employee.
Keep records that would let you reconstruct any payday's super calculation:
- ordinary hours as defined in the contract, award or agreement;
- the qualifying earnings base per pay period and the 12% calculation;
- fund choice forms, stapled fund requests and ATO responses;
- payment confirmations showing when contributions were received by each fund.
The ATO can ask for these records at any time, and employees are entitled to ask about their super.
What happens if super is late or missing
A late or missing contribution triggers the super guarantee charge (SGC). Under the Payday Super rules the SGC has four components:
- the unpaid super itself, being the individual final super guarantee shortfalls for the payday;
- notional earnings, calculated at the general interest charge rate and compounded daily from the day after the deadline until the shortfall is fixed or the ATO assesses;
- an administrative uplift, initially 60% of the shortfalls and notional earnings, reduced by 20 percentage points if you have not received an ATO-initiated assessment in the previous two years, and reducible further, potentially to nil, if you make a voluntary disclosure before assessment; and
- a choice loading if you failed to follow the choice of fund rules.
Under the old system you had to lodge a super guarantee statement. That is gone: for paydays from 1 July 2026 the ATO calculates the charge itself and sends a notice of assessment. Failing to pay an assessed charge on time attracts a further penalty of 25% of the unpaid amount, or 50% if you have already been penalised for an earlier notice within the previous 24 months, under s 59C of the Act.
The ATO has said it will take a supportive approach in the first year of Payday Super (2026-27), focusing compliance action on employers who are not moving to per-payday payments, are not fixing errors, or are not paying super at all. If you realise a payment was late or short, the best move is to pay the correct amount to the fund as soon as possible, before you receive an assessment.
A practical compliance checklist
Work through this checklist to keep your super obligations on track:
- Confirm every worker's status: employee, contractor, under 18, director.
- Map each pay item to qualifying earnings and document the basis, especially allowances, bonuses, commissions, leave loading and termination items.
- Set payroll to calculate 12% per payday on the qualifying earnings base, including salary-sacrificed amounts.
- Schedule super payments so funds receive them within seven business days of each payday.
- Collect fund choices from new employees and request stapled funds where there is no choice.
- Review the classification whenever you add an allowance, incentive, shift pattern or contractor.
- Keep the records listed above for audit readiness.
Where professional help is needed
Superannuation is a tax-administered obligation, so the first port of call for payroll configuration and calculation questions is usually your accountant, bookkeeper or payroll provider. A lawyer is useful where the classification questions are legal: whether a contractor is engaged wholly or principally for their labour, whether a payment is overtime or a bonus for ordinary hours, how an award or enterprise agreement defines ordinary hours, and how termination payments should be treated. If you have received an SGC assessment, or you have uncovered a historical underpayment, advice before you respond can meaningfully reduce the amount payable, including through a voluntary disclosure.
The changeover is where underpayments start
The most common mistake in the next twelve months will be payroll systems that still think in quarters. If your software or bookkeeper is still accruing super quarterly, or still paying on 28 January, 28 April, 28 July and 28 October, then every payday from 1 July 2026 is already a late payment and the SGC clock is running. This week, run one test pay cycle: check that 12% is calculated on the right qualifying earnings base, that salary-sacrificed amounts are included, and that the payment reaches the fund within seven business days. Fix the process before the ATO's first-year patience runs out.