Are you ready for Payday Super?
You might remember back on 2 May 2023 the Australian Government announced that from 1 July 2026,
employers will be required to pay their employees’ super guarantee (SG) at the same time as their salary and wages.
On September
18, 2024,
the government announced new measures regarding superannuation contributions:
-
Super Contributions Timing: Employers must pay superannuation guarantee (SG) contributions at the same time as employees’
salaries. If contributions are not received by the employees' super funds within 7 days of payday, employers will incur a super guarantee
charge (SGC).
-
Updated SGC: The SGC will now include:
-
Outstanding SG Shortfall: Any unpaid contributions will be calculated based on ordinary time earnings (OTE), with late
payments reducing this shortfall.
- Notional Earnings: An interest component to compensate employees for delayed contributions.
-
Administrative Uplift: An additional charge reflecting enforcement costs. Additional penalties and interest may apply if
SGC liabilities are unpaid.
- Tax Deductibility: The SGC will be tax-deductible.
-
SBSCH Decommission: The Small Business Superannuation Clearing House will be retired by July 1, 2026, encouraging small
businesses to use modern payroll solutions for super contributions.
-
SuperStream Updates: The deadline for super funds to process contributions will shorten to 3 business days from 20, with
improvements in data and payment standards.
-
STP Updates: Employers will need to report both OTE and total super liabilities for employees through Single Touch Payroll
to ensure accurate SG tracking.
This measure is not yet law. Why is this important?
This will have working capital and cash flow consequences that will impact every small business employer.
What are our clients doing about this?
While setting up a separate bank account for super enables our clients to set aside the funds and make sure they’re prepared for
payment by the due date, we have also started paying super in line with payroll now to avoid future cash flow issues.
How can we help?
We provide business advisory services including cash flow planning to our business owner clients.
Further Information
Contact Jenna Lawes of this office on 0418 303 323.
