What changed
Quarterly
Superannuation guarantee contributions were due 28 days after the end of each quarter. An employer could hold up to four months of contributions before paying them.
With every pay run
Contributions must be paid at the same time as salary or wages and reach the employee's fund within seven business days of payday. The first contribution for a new employee has 20 business days.
Charge and interest
The superannuation guarantee charge applies to late contributions, with an administrative uplift and daily interest. The ATO's small business clearing house closes as part of the change.
What it means for cashflow
Superannuation is 12% of ordinary time earnings. Under the quarterly system an employer held between one and four months of that before paying it over. Averaged across the quarter, that is roughly ten weeks of super contributions sitting in the business at any time. From July it is seven business days.
A business with a $20 million annual payroll pays $2.4 million a year in super. Under quarterly payment it held an average of about $350,000 of contributions at any time, peaking near $600,000 just before the quarterly due date. From 1 July the average balance held is close to $60,000. The difference, around $300,000, has left the business permanently. It is not a cost. It is working capital that was never the employer's and now behaves that way.
- The amount. 12% of ordinary time earnings, as before
- The obligation. It was always the employee's money
- Who you pay. The employee's nominated fund
- Frequency. Monthly payroll means 12 super payments a year instead of four
- The float. Around ten weeks of contributions on average, gone
- The pinch points. Super now lands in the same week as wages, every time
- Payroll and banking processes. Super runs with the pay run, not after the quarter
Why it matters more than it looks
The quarterly super float was one of the few outflows a business could legitimately time. It sat alongside BAS and company tax as a large, predictable payment with a known date, and many businesses planned their quarter around it without ever calling it a financing decision. From July it stops being lumpy and starts being constant, which means the cash has to be there every month rather than found once a quarter.
For a business whose other large outflows are also fixed in date, tax by legislation, debt by facility, there is now one fewer place to find room at a quarter end. Supplier payments are the only large outflow left where the timing is still partly a commercial choice, and in several states and sectors that is narrowing too.
The honest summary. Payday Super is good policy for employees and removes a float employers were never entitled to. It also removes it all at once, on 1 July, from every employer in the country. Businesses that planned around it need to decide what replaces it before the first monthly run, not after.
What to do before 1 July
- Model the first quarter. Run July to September with super leaving every pay run and the last quarterly payment still due on 28 July. Both fall in the same month.
- Check payroll and banking. Contributions must reach the fund within seven business days, so the payment has to leave on or close to payday, not be batched.
- Look at the outflows you can still influence. With super and tax both fixed in timing, how the remaining large payments are funded is where the working capital decision now sits.
When the date is fixed, the funding is the decision.
Pension and tax payments are fixed in date and method-only in our terms: the only lever is how the payment is funded on the day it leaves. The use case pages set out how that works and where it does not apply.
Sources: Fair Work Ombudsman, Payday Super: new rules starting 1 July 2026. Australian Taxation Office, Payday Super guidance. Housing Industry Association, Payday Super will impact your cashflow. Worked figures are illustrative and assume monthly payroll.