Don't trip over Payday Super this EOFY

Background

Under Payday Super, superannuation guarantee (SG) contributions must be paid at the same time as employees' salary or wages-called qualifying earnings (QE) day. In most cases, SG payments must be received by the employee's superannuation fund within seven business days of QE day.

By contrast, under existing rules SG contributions are paid quarterly in arrears, with payment due 28 days after the end of each quarter. For the quarter ending 30 June 2026, the SG payment deadline is 28 July 2026.

SG payments apply to SG shortfall first

A transitional rule proposed in the ATO's Law Companion Ruling 2026/D4 sets out how SG payments made between 1 July 2026 and 28 July 2026 will be applied where an employer has an individual SG shortfall for an employee for the quarter ending 30 June 2026.

Under the proposed rule, SG contributions made from 1 July 2026 will first be applied to reduce the employer's charge percentage for the quarter ending 30 June 2026.

Any remaining contribution amount will then be applied to a QE day that is on or after 1 July 2026. SG payments made after 28 July 2026 will be applied only to QE days on or after 1 July 2026.

This transitional measure may create issues for both employers and employees, including employers who intend to make SG payments for the quarter ending 30 June 2026 by the due date under the previous rules (that is, 28 July 2026). This is because SG payments made on or after 1 July 2026 to meet Payday Super obligations may instead be applied first to offset any outstanding SG liability for the 30 June 2026 quarter.