Payday Super Update

Treasury has made the first public statements about what their Payday super model will look like. It has taken a year and a half to get to this point from their first announcement in the May 2023 Federal Budget. With a targeted commencement date of 1 July 2026 there is a lot of work to do in what is a relatively short time given the magnitude of the initiative.

Treasury released a Fact Sheet that sets out their initial view on what their Payday Super initiative will look like.

Key points from the fact sheet include:

• Super to be “paid” on payday alongside wages i.e. the same day Ordinary Time Earnings (OTE) are paid
• Payments to be received by the fund within 7 calendar days
• 2 week grace period for new employees
• Small & irregular payments of OTE can be paid on the next regular payment of OTE
• SGC is retained but remodeled
• SG shortfall definition is aligned to the OTE definition
• Maximum SGC penalties are reduced with concessions for voluntary disclosure
• Super funds will have 3 days to process SG contributions or return (down from 20 days)
• Streamlined Choice rules
• ATO administered SBSCH to be retired

There is much work to do by your professional associations, Treasury, superannuation funds, clearing houses and the ATO before the initiative could be launched on 1 July 2026. Understand that we will be working diligently with the government, as the parameters of the measure are made certain and will keep you informed as material comes to hand.