Payday Super deadlines cause double whammy for small businesses

The article is relevant to members in Australia and was current at the time of publication.

With the introduction of Payday Super on 1 July now just over four months away, time is slipping away for businesses to have all their employee Superannuation Guarantee (SG) payments administration affairs in order.

From the start of the 2026–27 financial year, employers will need to ensure that super payments have been processed into their employees’ super fund accounts within seven working days of paydays.

Cashflow pressure

There is an added timing complication with the introduction of Payday Super, which many employers may not have even thought about, and this could place some businesses under cashflow strain.

Businesses that make their SG payments quarterly may have to come up with their employees’ super payments for the June quarter. Under the current regime, at around the same time, they must start paying their employees under the new Payday Super regime.

“For a very short period, there are two separate amounts due at the same time,” says Richard Webb, Superannuation Lead at CPA Australia. “For employers who are leaving things until the last moment, when payments are lawfully due under the current regime, they might find there’s a bit of doubling up.

“They will need to have the cashflow in place to make sure they’re able to get through that period. It’s a double whammy.”

The ongoing impacts

Gavan Ord, CPA Australia’s Business Investment and International Policy Lead, adds that moving from quarterly super payments to paying super with every pay cycle may have an ongoing impact on small business cashflow and payroll administration.

“For many small businesses, this change will require rethinking payroll processes, improving cashflow management, and making sure systems are compliant with the new rules.”

Ord says that for businesses operating on tight margins, the increased frequency of super payments makes forward planning and cashflow forecasting more important than ever.

“If cashflow isn’t proactively managed, Payday Super has the potential to put additional strain on small businesses.”

Upgrades to systems and administration

Many businesses may need to upgrade their payroll systems to handle real time super payments and integration with Single Touch Payroll.

“Paying super with each pay cycle will increase administrative work, particularly for businesses still relying on manual or outdated payroll processes,” Ord says.

Meanwhile, employers who still rely on the government’s free Small Business Superannuation Clearing House to pay their employees’ super — due to close on 1 July — will need to find a new clearing house service provider as soon as possible.

“The closure of the clearing house makes it even more important for businesses to review how they process super payments,” Ord says.

“While Payday Super adds pressure, it also presents an opportunity for small businesses to modernise payroll systems and improve cashflow discipline. Getting this right early will help businesses avoid compliance issues and costly ATO (Australian Taxation Office) penalties.”

How practitioners can help

Webb notes that accounting practitioners can have an important role to play in making sure their business clients are prepared for Payday Super and can provide advice on cashflow options.

“Accountants may look through a number of different options, which may not necessarily be just about businesses having a reservoir of cash built up but also whether existing lines of credit are adequate,” Webb says.

“They could be looking into things like balance sheet finance, but also to potentially doing some kind of partial pre-compliance with new requirements leading up towards the end of the financial year, so it’s not such a strain when Payday Super comes in.

“For employers looking to comply straight up on 1 July, they will need to actually know what happens to superannuation contributions once they hit send and how many days it is expected to take to reach the employee’s super fund.”

Webb says that with regards to cashflow, it is never too early to do a cashflow forecast to see where a business is at between now and the end of the first quarter of the new year.

“This is just to make sure businesses don’t find themselves not meeting their other expenses as and when they’re due, not just the Superannuation Guarantee payments.”