Payday Super is on its way from July 1 2026 and, whilst it’s a good policy, it’s a contradictory name and has a timing issue. The term “Payday” is linked to payday lending practices of loan sharks giving faster access to cash for workers (usually at grievous cost).
Ironically, Payday Super refers to the faster payment of super for workers who won’t get access to it for possibly many decades. Nonetheless, it’s designed to reduce the ability for businesses to use employees’ super entitlements to fund business cashflow which, when the business fails, leaves employees out of pocket.
Currently, employers have 28 days past the end of a quarter to pay an employees 12% super guarantee (SG) contributions into their super fund. A payslip may say that it’s been paid but it isn’t a requirement to actually pay it for an almost 4-month period after the work has been done.
From 1 July 2026, the super contributions will be required to align with payday and given the advancements in electronic transfers, should have been in place long ago.
There’s a catch in 2026 though relating to timing. Employers currently make the 12% SG payment in July for the April to June quarter. In 2026/27, under the new rules, an employee would be paid their full entitlement as they earn it, plus the extra July payment from the previous quarter’s earnings, meaning they could exceed the Concessional Contributions cap ($30k in a financial year). This is particularly likely for those who salary sacrifice extra to super as they earn it and for higher income earners. The result is generally extra tax is paid for that Fin year.
For the studious salary sacrificers, it’s probably worth holding off contributing extra to super until the amount of July contribution is understood and simply adjust regular super contribution to ensure the concessional cap isn’t breached. Alternatively, contribute it late in the 26/27 financial year rather than throughout the year and at least you’ve had access to the capital in the meantime. Then you can be more precise about getting up to, but not exceeding, the $30,000 cap.
The process of resolving an excess Concessional Contribution is not hard but it usually involves getting a letter from the ATO saying you owe money and no one likes opening that mail. With enough awareness the government could change policies to adjust for this timing issue that they’ve created, but on balance, it’s a policy that is positive for Australians.
