PayDay Super Prep: Get Your Onboarding and Payroll right

Updating your onboarding process and payroll systems in light of upcoming PayDay Super changes involves so much more than just getting employee TFN and super fund details early.

Here’s an end-to-end view of employee onboarding and payroll-related considerations as 1 July approaches. 

Update language in contracts

• Update employee contracts and welcome documents to remove references to ‘quarterly super payments’ and state that super contributions will be made every pay day.
  
  

Update your onboarding process: Make choosing a super fund easy

• Make collecting employee TFN and super fund details a high priority action item in your onboarding process to prevent missed or late payments.
  
• Present employees with their staple fund details along with standard choice form.
  
  • The ATO has made it easier than ever to find staple fund details for individuals within minutes. You can also request these in bulk. Learn more here.
    
• If an employee nominates a different fund, ensure that the USI (Unique Super Identifier) and ABN of the super fund are correct and what the employee had in mind.
  
  • This removes possible confusion over super funds with similar sounding names.
    
• In the case of employees with self-managed super funds or SMSFs, ask if their ESA (electronic service address) is active to be able to comply with Payday Super and SuperStream changes. Learn more about PayDay Super changes for SMSFs here.
  
• If a staple fund is not found and the employee does not nominate a fund, set up new employees on your organisation’s default fund which must be:
  
  
  • APRA registered and
  • Offer a MySuper product

• Ensure you (nor your onboarding services provider) are advertising non-compliant superannuation products.
• In all instances, verify that the employee’s chosen fund is SuperStream compliant.
  
• If you work with an onboarding services provider, check that they have taken steps to be compliant.
   

Update employee details: Don't get caught out over spelling errors

Get all employees and contractors to confirm the following details before 1 July 2026:

• Full name (first, middle, and last name) as it appears in the employee’s super fund.
  
  • Check for name changes, maiden names, shortened names, any missing middle names, and spelling errors.
    
• Date of birth
  
• Tax File Number (TFN)
  
• Super fund details, including:
  
  • member number
  • fund ABN and
  • USI (Unique Super Identifier)
    
    

Get your Qualifying Earnings (QE) right

Because paying the right super guarantee (SG) begins with correctly calculating the qualifying earnings (QE) for all employees and contractors in each pay run.

• Know what allowances and entitlements apply under different award classifications and enterprise agreements: including bonuses, commissions, paid leave, etc.
• Make sure your rostering and time-sheeting processes are well-tracked and error free.
• Ensure your payroll software is updated to handle the new same-day-super calculations. Look out for updates within your payroll software or ask your provider.
  
  

Streamline your payroll and clearing processes

• Check that your ABN is the same across your Single Touch Payroll (STP) system and your super clearing house to prevent payment delays or rejection.
• Ask your default super fund provider if it’s NPP compatible. NPP (New Payments Platform) is the new real-time payment method that allows super funds to receive contributions faster. Learn more about NPP under the Faster Payments section in this article.
  
  • From 1 July 2026, all super funds should be able to receive employer contributions via the NPP. However, employers and their service providers can choose whether to use this payment method. So, check that you haven’t accidentally chosen to not use NPP.
    
• If you use the ATO’s free clearing house SBSCH, it will permanently close on 1 July 2026.
  
  • The ATO has been communicating directly with businesses to help them figure out alternatives. Explore your options early.
  • Note: Remember to download your records from the SBSCH before 1 July.
• Check for any bottlenecks in your payroll or super clearing processes such as manual calculations or approvals.
  
• An overview of major changes to SuperStream by the ATO can be found here.
  
  

Document all changes

• Document all changes you have made to your onboarding process and include evidence wherever necessary.
• Save these in clearly labelled folders in a centralised cloud-based repository for easy access.
  
  

PayDay Super: Quick recap of facts

• From 1 July 2026, employers will need to pay super on pay day and not quarterly.

• OTE versus QE: SG will now be based off Qualified Earnings (QE), which expands on the definition of OTE. 
  • Unlike ordinary hours (OTE), QE includes commission earned during overtime hours, certain parts of salary sacrifice and payment in lieu of leaves. Learn more here. 

• Employers have to ensure super contributions reach employees' choice of fund within 7 days.
  

• The 7-day window also applies to out-of-cycle payments.

• PayDay Super rules apply to all employees and contractors.

• Maximum Contributions Base (MCB) which used to be applied quarterly, will apply annually from 1 July 2026.

• Up to 200% in maximum penalties may apply for late super payments and company directors to be held personally liable.

Exceptions to the 7-day rule

The ATO has said it will be strict when enforcing the 7-day window and penalties for delaying Super payments. Exceptions to the 7-day rule include:

• New employees: In the case of new hires, the ATO may allow up 20 days for the very first super contribution to come through.

• Employee changes Super fund: When an existing employee switches to a new fund, the employer may be able to get up to 20 days to ensure the new details are set up in their system and the SG payment comes through.

• New employment arrangement or rejoining after resignation: In both cases, you will have 20 days to ensure SG payments reach the employee.

• Fund becomes non-compliant: If an employee's fund becomes non-compliant, you will essentially have to go through the choice of find process again, allowing you up to 20 days.

We hope you found this information valuable. We urge you to start taking these steps sooner rather than later. Please share this article with someone in your network who may benefit from this information.

If you have any questions about PayDay Super for us, 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.