Seven business days. A business day is any day that is not a Saturday, Sunday, or a public holiday that applies across an entire state or territory. Note that if a public holiday applies in any Australian state or territory — even one you don’t operate in — that day doesn’t count as a business day for Payday Super purposes. Partial-area public holidays (such as the Royal Hobart Show Day) do count as business days.

Yes, Payday Super legislation has passed.

Qualifying earnings (QE) is the new term for the earnings base used to calculate both the super guarantee and the SGC from 1 July 2026. Currently, the SG is calculated on ordinary time earnings (OTE) and the SGC on salary and wages — two different bases. QE unifies these.

In practice, QE closely mirrors OTE for most employees. The main additions are: all commissions (including those earned entirely outside ordinary hours), and amounts salary sacrificed to super that would otherwise have been qualifying earnings. There are no changes to what counts as OTE under Payday Super.

For a comprehensive list of what is and is not qualifying earnings, see the ATO’s What payments are qualifying earnings.

Salary sacrificed to super is included in qualifying earnings — to the extent that it would have been qualifying earnings if it had been paid as salary instead. For example, if an employee sacrifices part of their base wage to super, that sacrificed amount remains in the QE base and super is calculated on the gross (pre-sacrifice) amount. However, if an employee sacrifices overtime pay (which is not QE) to super, that sacrificed overtime remains excluded from QE.

Amounts salary sacrificed to non-super benefits (such as cars, laptops, or other fringe benefits) are not qualifying earnings.

Most bonuses are qualifying earnings and super must be paid on them. This includes performance bonuses, Christmas bonuses, sign-on bonuses, referral bonuses, and return-to-work bonuses after parental leave.

The key exception is a bonus paid solely in respect of work performed entirely outside ordinary hours (i.e. a purely overtime-related bonus). That type of bonus is not qualifying earnings. However, if a bonus is for general performance or relates at least partly to ordinary hours work, it will be qualifying earnings.

Because bonuses may be paid outside a regular pay cycle, they may qualify as an “out-of-cycle payment,” in which case the super contribution may be able to be bundled with the next regular payday’s super rather than triggering a separate 7-day window.

It depends. Independent contractors who are paid mainly for their labour (rather than for a result or deliverable) are treated as employees for super guarantee purposes — this is not a new rule. Their payments are qualifying earnings and super applies. This has not changed under Payday Super. If you pay contractors in this way, Payday Super will apply to those payments from 1 July 2026 just as it does for employees.

Common payments that are not qualifying earnings include:

• Overtime payments (where ordinary hours are clearly identified in an award or agreement)
• Annual leave loading linked to a lost opportunity to work overtime
• Employer-funded or government paid parental leave
• Unused leave paid on termination (annual leave, long service leave, personal leave)
• Redundancy, severance, and genuine redundancy payments
• Jury duty, community service, and defence reserve leave
• Expense allowances expected to be fully spent (e.g. a tool allowance)
• Workers’ compensation where the employee is not required to attend work
• Long service leave paid under a portable long service leave scheme

The new SGC has four components, assessed by the ATO (not self-assessed as now):

• Individual final SG shortfall: The unpaid super still outstanding when the ATO makes an assessment — after deducting any late contributions already received by the fund.
• Notional earnings: Daily compounding interest on the shortfall, calculated at the general interest charge rate, accruing from the day after the deadline until the assessment date.
• Administrative uplift: Initially set at 60% of the shortfall plus notional earnings. Regulations may allow this to be reduced in some cases — but those regulations are not yet law.
• Choice loading: 25% of contributions for any payday where choice of fund rules weren’t followed, capped at $1,200 per notice period.

Unlike the current SGC, the new SGC itself is tax deductible. However, interest on unpaid SGC and any late payment penalties are not deductible. Interest accrues on any unpaid SGC from assessment date. If you don’t pay the SGC within 28 days of assessment, a further notice to pay is issued, and non-payment then leads to a late payment penalty of 25% (or 50% if you’ve had a penalty in the previous 24 months) — which cannot be remitted.

The administrative uplift replaces the old flat $20 per-employee administration fee that currently forms part of the SGC.

The uplift starts at 60% of the total SG shortfall plus notional earnings for a QE day. It can be reduced — potentially to nil — based on two factors:

Compliance history: A 20% reduction applies if the ATO has not initiated any SGC assessment against the employer in the 24 months ending on the relevant QE day. Importantly, because Payday Super starts on 1 July 2026, this 24-month window cannot commence before that date — meaning any SG issues identified and rectified before 1 July 2026 will not count against an employer’s compliance history for this purpose.

Voluntary disclosure: A further reduction of up to 40% applies if the employer lodges a voluntary disclosure before the ATO makes its own independent assessment. The size of the reduction depends on timing — a disclosure made within 30 days of the QE day attracts the full 40% reduction, while a disclosure made more than 120 days after the QE day attracts only a 15% reduction, with a sliding scale in between.

In practical terms, an employer with a clean 24-month compliance history who discloses an error within 30 days faces a 60% uplift reduced by 20% (compliance history) and a further 40% (timely voluntary disclosure) — bringing the uplift to nil. Conversely, an employer who waits for the ATO to find the problem will face the full 60% with no reductions available.

The law does not set a fixed date by which the ATO must issue an assessment. The SGC liability technically arises the moment the 7-business-day window closes without sufficient contributions being received by the fund, but the ATO has discretion about when it formally exercises its power to issue a SGC assessment.

Because employers report qualifying earnings and super liabilities through Single Touch Payroll on every payday, and super funds separately report when contributions are received, the ATO can match these two data sets in close to real time. It can identify a shortfall as soon as the deadline passes without needing to audit the employer or wait for an employee complaint.

In practice, the timing of an assessment depends on how the employer has behaved. There are effectively three scenarios:

• The employer lodges a voluntary disclosure statement. Where an employer identifies a shortfall and lodges a voluntary disclosure before the ATO acts, the ATO will generally raise an assessment based on that disclosure rather than issuing its own. This is the preferred path — the employer controls the timing, secures the uplift reductions, and avoids a commissioner-initiated assessment.

• The ATO initiates its own assessment. Where no voluntary disclosure has been lodged, the ATO can assess at any time after the deadline passes. How quickly it does so depends on the employer’s risk profile. The ATO’s approach in the first year of Payday Super will be to focus early compliance on high-risk employer’s – those with persistent or unresolved super shortfalls.

• The employer pays the late contribution before any assessment. If an employer makes a late contribution to the fund after the 7-business-day window but before the ATO issues an assessment, that contribution reduces the individual final SG shortfall and therefore reduces the base on which notional earnings and the administrative uplift are calculated. The employer should still lodge a voluntary disclosure to formally bring the shortfall to the ATO’s attention and secure the available uplift reductions.

The critical practical point is that the window between the deadline passing and an assessment being issued is the only time an employer can access the voluntary disclosure reductions. Once the ATO issues an assessment — whether based on a voluntary disclosure or on its own initiative — those reductions are locked in at whatever level applied at the time, and no further reductions are available.

The 25% and 50% penalties are not part of the SGC itself. They are a separate consequence that only arises if an employer fails to pay an assessed SGC after being formally notified to do so. They do not apply simply because super was paid late, and they do not apply if the assessed SGC is paid promptly.

The sequence is as follows:

An SGC assessment is issued whether by the ATO or voluntary disclosure. The assessed amount — comprising the SG shortfall, notional earnings, and any administrative uplift and choice loading — becomes payable on the day of assessment. At this point no penalty has been imposed. The employer has 28 days to pay before the ATO takes any further step.

A Notice to Pay is issued. If the assessed SGC has not been paid within 28 days of assessment, the ATO is required to issue a Notice to Pay specifying the outstanding amount. The employer then has a further 28 days to pay that amount in full.

The 25% penalty is triggered. If the employer does not pay the amount specified in the Notice to Pay within those second 28 days, a late payment penalty of 25% of the outstanding SGC amount is automatically imposed. This penalty cannot be remitted — unlike the current penalty framework where the ATO has broad discretion to reduce or waive penalties, there is no such discretion here.

The 50% rate applies. If the employer has been liable for the same late payment penalty at any point in the previous 24 months, the rate increases from 25% to 50% of the outstanding amount.

General interest charge also accrues on the unpaid SGC from the day after it becomes due until the debt is paid in full. Interest does not accrue on the late payment penalty itself, only on the underlying SGC debt.

In summary, an employer who receives an assessment and pays it within 28 days faces no penalty at all. The penalties are a last-resort consequence for employers who are assessed and then still fail to pay.

The following example uses the same facts across three scenarios to illustrate how the outcome changes depending on how the employer responds. Round numbers are used throughout.

The facts: An employer pays an employee $5,000 in qualifying earnings on payday. The required super contribution is $600 (12% of $5,000). The employer misses the 7-business-day deadline entirely — no contribution is made. The general interest charge rate is assumed to be 11% per annum. The employer has a clean compliance history with no ATO-initiated assessments in the previous 24 months.

Scenario 1 — Voluntary disclosure lodged 30 days after the QE day, contribution paid to fund on the same day

The employer spots the error, pays the $600 to the fund, and lodges a voluntary disclosure on day 30.

Because the contribution has been paid in full before the disclosure, the individual final SG shortfall is nil. Notional earnings (interest) have accrued for approximately 23 days on the $600 shortfall — from the day after the deadline to the day the contribution was received by the fund — amounting to approximately $4.

Because the final shortfall is nil at the time of the voluntary disclosure, the administrative uplift may be reduced to nil. Even if a small uplift applies, the reductions for a clean compliance history (20%) and timely voluntary disclosure within 30 days (40%) together eliminate it entirely in this scenario.

The ATO raises an assessment for approximately $4 — the notional earnings only.

Total cost: approximately $4, plus the $600 already paid to the fund.

What is tax deductible: the $600 super contribution is deductible when paid. The $4 notional earnings component of the SGC is also deductible when paid, as the SGC itself is now tax deductible.

What is not deductible: nothing in this scenario falls outside the deductible SGC amount, because no penalty or post-assessment interest has been incurred.

Scenario 2 — ATO initiates its own assessment 90 days after the QE day, no contribution made

The employer does not identify the error and makes no voluntary disclosure. The ATO identifies the shortfall through STP and fund matching data and issues an assessment on day 90.

Because no contribution has been made, the individual final SG shortfall is the full $600.

Notional earnings have accrued for approximately 83 days on the $600 shortfall, amounting to approximately $15.

The administrative uplift is 60% of ($600 + $15) = $369. No reductions apply — the compliance history reduction is unavailable because the ATO initiated the assessment rather than the employer disclosing voluntarily, and the voluntary disclosure reduction is unavailable for the same reason.

Total SGC assessed: $600 + $15 + $369 = $984.

The employer pays the $984 within 28 days of assessment.

Total cost: $984.

What is tax deductible: the entire SGC of $984 — including the shortfall, notional earnings, and administrative uplift — is deductible when paid. This is one of the key changes under Payday Super: the SGC is now deductible, unlike the current regime.

What is not deductible: nothing additional in this scenario, because the assessment was paid on time and no further penalty or post-assessment interest was incurred.

Scenario 3 — ATO assessment issued on day 90, employer does not pay, penalty imposed

The facts are the same as Scenario 2. The ATO issues an assessment for $984 on day 90. The employer does not pay within 28 days. The ATO issues a Notice to Pay on approximately day 118. The employer still does not pay within the following 28 days.

On approximately day 146, the 25% late payment penalty is automatically imposed: 25% × $984 = $246.

General interest charge has also been accruing on the unpaid $984 from the day after the assessment. At 11% per annum over approximately 56 days from assessment to penalty date, that is roughly $17 in additional interest.

Total exposure: $984 (SGC) + $17 (post-assessment interest) + $246 (penalty) = approximately $1,247.

If this employer has had the same penalty imposed within the previous 24 months, the penalty rate rises to 50%, making the penalty $492 and the total approximately $1,493.

What is tax deductible: the SGC of $984 is deductible when paid.

What is not deductible: the post-assessment general interest charge of $17 and the late payment penalty of $246 (or $492) are both non-deductible. The penalty also cannot be remitted — there is no discretion available to the ATO to reduce or waive it once it has been imposed.

The comparison across the three scenarios makes the incentive structure clear. The same underlying missed payment of $600 costs approximately $4 if caught and disclosed within 30 days, $984 if left to the ATO to find at 90 days, and over $1,200 if the assessment is then also ignored. Acting early and cooperating with the process is, by a significant margin, the lowest-cost outcome.

Yes. Choice of fund obligations continue. Under Payday Super, there will be a new option to request your employee’s stapled super fund from the ATO at the same time you provide them with the choice of fund form — rather than as a separate subsequent step. The underlying obligation to follow choice of fund rules remains, and failing to do so results in a choice loading added to the SGC. You will not have a choice loading if you attempted to pay to a stapled fund provided by the ATO but the fund would not accept the contribution.

The SBSCH closed to new users on 1 October 2025. Existing users can continue using it until 30 June 2026. From 1 July 2026, the SBSCH is no longer available to anyone. If you currently use the SBSCH, you need to arrange an alternative before that date. Options include commercial clearing houses integrated with your payroll software, or direct payments to super funds via SuperStream.