Payday Super changes – what they mean and how they could boost super for some
Payday Super means employers must pay super at the same frequency as they pay wages. The changes are being introduced to improve retirement outcomes and reduce unpaid super. Moving away from quarterly payments means more frequent compounding – and may also result in higher super payments on bonuses for some high income earners.
From 1 July 2026, Payday Super changes will require employers to pay super at the same time as wages, rather than quarterly.
For many Australians, this may increase super balances over time through more frequent payments, which increases compounding and could result in more super at retirement.
For higher income earners, particularly those paid bonuses or commissions, it can materially change how quickly super lands in your account.
In some cases, it could require employers to pay some high income earners more super on bonus payments than they pay under the present system.
What is Payday Super?
Payday Super means employers must pay compulsory Superannuation Guarantee (SG) contributions with the same frequency as regular pay – so that it’s received by the super fund generally within seven business days of the employee’s payday.
Under the current system, employers can pay super quarterly. From 1 July 2026, many employers will need to pay super more frequently.
In practical terms, this aligns super more closely with how and when income is earned – and significantly reduces the risk of unpaid or late super.
When will Payday Super start?
Payday Super is legislated to start from 1 July 2026, so employers will need to update payroll systems and cash flow processes ahead of this date.
How Payday Super changes how super is paid
The biggest shift under the new Payday Super rules is frequency.
For most people, how super is calculated stays largely the same. What changes is when it’s paid.
Instead of a minimum of four super payments a year, contributions will need to be made every pay cycle – whether that’s weekly, fortnightly or monthly.
This delivers several benefits:
- less delay between earning income and receiving super
- improved transparency through payslips and fund reporting
- lower risk of unpaid super.
How Payday Super affects your super balance
Earlier super contributions generally results in better long-term outcomes.
When super is paid more frequently, money enters your account sooner and has more time to compound. Over time, it adds up – even if the annual contribution amount doesn’t change.
How more frequent SG could mean more super at retirement
| Age | Super balance at retirement (quarterly SG) | Super balance at retirement (fortnightly SG) | Additional super at retirement |
| 25 | $556,150 | $560,458 | $4,308 |
| 35 | $596,015 | $599,404 | $3,389 |
| 45 | $502,520 | $504,303 | $1,783 |
| 55 | $393,445 | $393,804 | $359 |
1Balance assumes retirement at 65, in today’s dollars. Super earns 6.2% per annum, net of tax and fees. Starting balance is based on APRA average and average earnings for that age2.
Super on bonuses and variable income
Payday Super changes will be most noticeable for people with variable income.
From 1 July 2026, the amount of SG payable will be calculated on Qualifying Earnings (QE), which for most people will be the same as ordinary time earnings (OTE), or what an employee receives for their ordinary hours of work. It typically includes:
- base salary
- bonuses
- commissions.
Under current rules, the maximum amount of an employee’s earnings that an employer is required to pay SG on is restricted by a quarterly limit (currently $62,500). However, under the new Payday Super rules, this quarterly limit no longer applies and is replaced by an annual limit. From 1 July 2026, the annual limit is $270,830.
Due to this change, employees with variable income who receive high income in a particular quarter, such as those receiving a bonus, may receive higher SG contributions as the quarterly limit no longer applies.
Example: Merida earns a $220,830 salary and a $50,000 annual bonus
Merida earns an executive salary of $220,830 which is paid monthly. Her annual performance bonus for the previous financial year of $50,000 is paid in September 2026.
If quarterly SG rules had continued into the 2026–27 financial year, compulsory SG in any quarter would have been limited to a maximum of $8,125 (12% of the maximum contributions base which would have been $67,708 on a quarterly basis).
This would have meant that in Q1, when Merida is paid her bonus, her employer is only required to pay SG of $8,125 – even though 12% of her earnings (which includes her September bonus) equates to $12,625.
However, under Payday Super rules, the quarterly SG limit does not apply. Under Payday Super, Merida would be paid the full $12,625 – resulting in an additional $4,500 paid to her super account.
Under these rules, her employer would not stop paying SG into her super fund until she has earned the annual maximum contributions base of $270,830 – which in her case would happen at the end of the year. For some executives the limit would be reached sooner.
| Current rules | Payday Super rules | ||||
| SG pay cycle | OTE | SG payable | SG pay cycle | QE | SG payable |
| Q1 | $18,403 | July | $18,403 | $2,208 | |
| $18,403 | August | $18,403 | $2,208 | ||
| $68,403 | $8,125 | September | $66,667 | $8,208 | |
| Q2 | $18,403 | October | $18,403 | $2,208 | |
| $18,403 | November | $18,403 | $2,208 | ||
| $18,403 | $6,625 | December | $18,403 | $2,208 | |
| Q3 | $18,403 | January | $18,403 | $2,208 | |
| $18,403 | February | $18,403 | $2,208 | ||
| $18,403 | $6,625 | March | $18,403 | $2,208 | |
| Q4 | $18,403 | April | $18,403 | $2,208 | |
| $18,403 | May | $18,403 | $2,208 | ||
| $18,403 | $6,625 | June | $18,403 | $2,208 | |
| Total | $270,830 | $28,000 | Total | $270,830 | $32,500 |
What Payday Super means for high income earners
For higher income earners, the shift in frequency from quarterly SG payments to Payday Super may mean:
- Higher earners will reach the annual SG cap faster – giving SG payments more time to compound.
- SG payments will stop for the rest of the financial year once the maximum payable annual SG amount is reached.
Risk of excess concessional contributions
Payday Super may increase the risk that individuals exceed the annual limit on concessional (pre-tax) contributions.
The concessional contribution cap (CCC) is the annual limit on pre-tax contributions, including mandatory employer SG payments, salary sacrifice and personal contributions, for which you can claim a tax deduction.
The CCC, which is currently $30,000 a year, will increase to $32,500 from 1 July 2026³.
Because SG is paid more frequently and bonuses attract immediate super:
- Super paid on a bonus may cause the CCC to be exceeded.
- The CCC (and maximum SG amount) may be reached earlier than expected.
- Salary sacrifice may continue with the employee unaware the cap has been reached.
If you exceed your CCC, excess concessional contributions (ECC) are included in your assessable income and will be taxed at your marginal tax rate, less a 15% offset for the tax already paid in your super.
How to prepare for Payday Super changes
Whether you’re an employee or employer, preparation matters.
Practical steps include:
- checking super contributions regularly
- understanding how close you are to the concessional (pre-tax) contribution cap (CCC)
- reviewing how bonuses are structured and paid.
Next: Understand the difference Payday Super could make to you
Understanding the importance of when your super is paid, and how it compounds, is just as important as understanding how much you contribute.
1. Balance assumes retirement at age 65 and shown in today’s dollars (discounted by 3.7% pa). Starting super balance is equal to the average balance of member in relevant age range from APRA quarterly super statistics (September 2025). Salary starts at average weekly cash earnings for age bracket for May 2025 (ABS) and increases by 3.7% pa. Super Guarantee contributions are subject to 15% contributions tax and are paid at the end of the relevant quarter or fortnight. Super is assumed to earn 6.2% per annum, net of tax and fees.
2. Average Weekly Earnings, Australia, Australian Bureau of Statistics, published 26 February 2026.
3. Note that a higher concessional cap may be available if eligible to carry forward unused cap amounts from previous financial years.
Source: Colonial First State
