PayDay Super is set to inflict more pain on businesses already battling serious cashflow pressures. Having to pay super at the same time as salary and wages will take away the quarterly liquidity buffer that businesses rely on for things like vendor payments, equipment purchases and discretionary bonuses. In June and July, as super obligations overlap, businesses will feel the cash crunch most acutely. And that's just the start.
Doubling up of super obligations in June–July
The biggest strain on cashflow will come from the effective doubling up of super obligations in July from the super owed for:
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the June quarter and
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every pay run in the month of July
Late payment offsets no longer available. Payments apply to oldest outstandings first.
Late payment offsets will no longer be available under PayDay Super. Payments will automatically be applied to the oldest outstanding liability.
This means, any super contributions made between 1 and 28 July 2026, will go towards your outstanding June 2026 super obligations first. Any remaining contribution amount will then be applied to pay days on or after 1 July 2026.
This can create a situation where you think you’re paying super the same day as wages in July, but in reality, it's still counting towards your June quarter obligation, potentially leading to multiple late SG (Super Guarantee) payments for pay days in July.
Our advice: Clear your quarterly super obligation for April–June before transitioning into same day super payments in July.
June quarter late payment not tax-deductible
If your SG contribution for the June quarter is late (paid after 28 July 2026) it will not be tax- deductible.
Under PayDay Super, however, late SG contributions will be tax deductible with the SGC component (Super Guarantee Charge including the base shortfall and notional interest) remaining non-deductible.
Can you still get a tax deduction on your super obligations for the June quarter?
To be able to claim a tax-deduction in the 2026 financial year, pay any super you owe for the June quarter before 30 June 2026.
If you pay between 1 and 28 July, you can still claim a tax deduction, but it will only make its way to you in 2027's returns.
Loss of the 3-month liquidity buffer: The big mental shift
The big test is adjusting to money leaving the bank account more frequently.
Making the shift from quarterly to monthly, fortnightly, and even weekly super payments is essentially about learning to sustain higher, continuous liquidity.
It may be helpful to work with an experienced cashflow advisor or external CFO.
Not too much, not too little: Importance of paying the right amount of super
PayDay Super is not just about paying super on time; it’s also about paying it in full.
Underpaying: Shortfalls attract interest charges that compound daily and up to 60% of the shortfall and notional earnings as administrative uplift fees.
Depending on your pay frequency, you are potentially looking at 12, 26, or 52 opportunities of getting hit with late penalties by the ATO .
Excess payment: If you overpay super, it is automatically carried forward to the employee’s SG for the next pay period(s) within the financial year.
You have the option to apply for a refund from the fund, but while that is sorted, cash you could put to work will be sitting tied up in a super fund.
Make sure your systems and processes are tuned up and ready to support Qualified Earnings—and hence the right super contribution amounts—accurately.
Clear your June super obligations by 30 June 2026
While you still have until 28 July to pay off your super obligations for the June quarter, we strongly recommend clearing your June super obligations before 30 June.
This can help you to:
• avoid a major cash crunch in July
• avoid ATO penalties from confusion around overlapping due dates
• claim a tax deduction on your June super this financial year
We hope you found this information valuable. If you have questions about PayDay Super or working with a cashflow advisor or CFO, please don’t hesitate to reach out to us.
This article is intended to provide general information only and is not to be regarded as legal or financial advice. The content is based on current facts, circumstances and assumptions, and its accuracy may be affected by changes in laws, regulations or market conditions. Accordingly, neither Azure Group Pty Ltd, nor any member or employee of Azure Group or associated entities, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused. Readers are advised to consult with qualified professionals for advice specific to their situation before taking any action.
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