Running a business involves juggling a lot, but your super guarantee obligations to your employees aren't something you can let slide. Since 1 July 2026 the rules have tightened considerably: super is now due every payday, not every quarter, and the ATO assesses the charge automatically when contributions are late. Here's what you need to know.
What is the superannuation guarantee?
The superannuation guarantee (SG) is the minimum amount of super an employer must pay for eligible workers. The rate is 12% and has been since 1 July 2025, when the last of the legislated increases took effect. It isn't scheduled to rise further.
- 1 July 2023 to 30 June 2024: 11%
- 1 July 2024 to 30 June 2025: 11.5%
- From 1 July 2025: 12%
The rate that applies depends on when you pay the wages, not the period the work relates to. Wages paid on or after 1 July 2025 attract 12% even if part of the pay period fell before that date.
Who you have to pay super for
Since 1 July 2022 there's no minimum earnings test. The old rule that super only applied once an employee earned $450 or more in a calendar month was removed, so you generally pay SG for every employee, whatever they earn, including full-time, part-time and casual staff. Two groups have an hours test instead:
- Employees under 18: only covered in a week they work more than 30 hours. You can't average hours across a fortnightly or monthly pay period.
- Private or domestic workers (such as a nanny or housekeeper): only covered in a week they work more than 30 hours.
Contractors can be employees for super
Calling someone a contractor doesn't settle it. If you pay a contractor under a contract that is wholly or principally for their labour (they do the work personally and are paid for their time and skills rather than to achieve a result), they're treated as an employee for SG purposes. That's the case even if they have an ABN and invoice you. The contract has to be with the individual: engaging their company, trust or partnership generally falls outside this rule. Our guide to contractors for superannuation purposes explains the test in more detail, and employee or independent contractor covers the wider question.
How much super to pay: qualifying earnings
From 1 July 2026, SG is worked out on each employee's qualifying earnings (QE) for each payday. QE is mainly ordinary time earnings (pay for ordinary hours, including paid leave, most allowances, bonuses and commissions), plus any amount the employee salary sacrifices into super that would otherwise have been QE. Overtime is generally not included.
Including salary-sacrificed amounts means salary sacrifice can't be used to reduce the SG you pay. For example, Sam earns $2,000 a fortnight and salary sacrifices $200 of it into super. Sam's QE is still $2,000, so the SG is $240 (12% of $2,000), paid on top of the $200 salary sacrifice contribution.
Maximum contribution base
There's a cap on the earnings you must pay SG on. For 2026–27 the maximum contribution base is $270,830 of qualifying earnings for the year (it was previously a quarterly limit, $62,500 a quarter in 2025–26). Once an employee's QE for the year reaches that figure, you don't have to pay SG on further earnings, although an award or enterprise agreement may still require you to.
When super is due: Payday Super
Up to 30 June 2026, SG was paid quarterly. The last quarterly due date was 28 July 2026, for the April to June 2026 quarter.
From 1 July 2026, under Payday Super, you must pay super each time you pay qualifying earnings, and the contribution has to reach the employee's fund within 7 business days of payday, with enough detail for the fund to allocate it. Sending the payment isn't enough: it has to be received. Payments rejected by a fund don't get extra time.
For example, if you pay wages on Thursday 5 November 2026, that pay's super must be in the employee's fund by Monday 16 November 2026 (assuming no public holidays in between).
There's a longer window of 20 business days for a new employee's first contribution and when an employee changes to a new fund. For out-of-cycle payments, the super is due 7 business days after your next regular payday. Our article on Payday Super covers the practical payroll changes.
The Small Business Super Clearing House has closed
The ATO's free Small Business Superannuation Clearing House (SBSCH) closed at the end of 30 June 2026, so it can't be used for Payday Super. You now need payroll software or a commercial clearing house that can send super with each pay run. Allow for the clearing house's processing time so the money reaches the fund within the 7 business days. If you're choosing a system, see our guide to payroll software in Australia.
Which fund to pay into: choice and stapled funds
Most employees can choose their own super fund. When someone starts, you must give them a Superannuation standard choice form within 28 days.
- If they choose a fund, pay into that fund.
- If they don't choose, you must request their stapled super fund (the existing fund that follows them from job to job) from the ATO through Online services for business, and pay into that.
- Only if the ATO tells you they have no stapled fund do you pay into your default fund, which must be authorised to offer a MySuper product.
Stapled fund requests are only needed for employees who started on or after 1 November 2021. If you pay into the wrong fund, the super guarantee charge can include a choice loading. You can't recommend a particular fund to employees unless you're licensed to give financial advice. Keep completed choice forms for five years; you don't send them to the ATO.
Tax deductions for super contributions
Super you pay for employees on time is generally tax deductible in the income year the fund receives it. That's worth remembering at the end of June: super for a late-June payday that doesn't reach the fund until July is deductible in the following year.
What happens if you miss a payment: the super guarantee charge
If super doesn't reach the fund within 7 business days of payday, you're liable for the super guarantee charge (SGC). Under Payday Super, the ATO assesses the charge itself using your Single Touch Payroll data and fund reports. For each payday the SGC is made up of:
- the shortfall: the super that wasn't paid on time
- notional earnings: interest on the shortfall, at the general interest charge rate compounding daily, from the day after the due date
- an administrative uplift: up to 60% of the shortfall plus notional earnings. It's reduced by 20 percentage points if you haven't had an ATO-initiated assessment in the previous two years, and by up to 40 percentage points if you make a voluntary disclosure, depending on how quickly you lodge it.
- a choice loading, if you didn't pay into the right fund
Paying the late contributions reduces the shortfall, but the notional earnings and administrative uplift still apply, so paying late can't bring the charge to nil. Unlike the old regime, the SGC for paydays from 1 July 2026 is tax deductible.
If the SGC isn't paid within 28 days of the assessment, the ATO issues a notice to pay. If that isn't paid within 28 days, a late payment penalty of 25% of the outstanding charge applies, rising to 50% if you've had the same penalty in the previous 24 months. This penalty can't be remitted and isn't deductible.
Missed contributions for quarters up to 30 June 2026 are still dealt with under the old quarterly rules: you lodge a super guarantee statement and pay the SGC to the ATO, that charge isn't deductible, and penalties of up to 200% can apply.
For the first year of Payday Super (paydays from 1 July 2026 to 30 June 2027), the ATO has said in PCG 2026/1 that it will focus on employers who aren't paying super each payday or aren't fixing errors quickly. If you discover a mistake, pay the correct amount to the fund as soon as you can.
Sources: ATO, Super guarantee rates, ATO, Work out if you have to pay super, ATO, Payment deadlines for Payday Super, ATO, What payments are qualifying earnings, ATO, Maximum contribution base, ATO, What happens if you don't pay super correctly, ATO, Offer employees a choice of super fund.
Need help with your super obligations?
If you're unsure whether you're paying the right amount, to the right fund, on time, or you've missed payments and want to fix them before the ATO does, contact our team or book an appointment. We can review your payroll setup and help you get on top of Payday Super.
How do I get help with this from the ATO?
The ATO provides guidance through ato.gov.au, the Small Business Support Line (13 28 66), and Online Services for individuals and businesses. For complex situations, a registered tax agent provides advice tailored to your specific circumstances with professional indemnity protection. Verify agent registration at the TPB register at tpb.gov.au.
What records do I need to keep for tax purposes in Australia?
Most tax records must be kept for five years from the date of lodgement or the date the transaction occurred, whichever is later. Records must be in English or convertible to English and sufficient to explain your income and deductions. The ATO can request records at any time within the retention period and may disallow claims without adequate supporting evidence.
When should I engage a registered tax agent in Australia?
Consider a registered tax agent when your affairs involve multiple income sources, business activity, investment properties, capital gains, or overseas income. Agents extend your lodgement deadline, provide safe harbour protection, and take professional responsibility for the advice given. Verify registration at tpb.gov.au before engaging any tax adviser.
How does the ATO calculate penalties for tax compliance failures?
The failure to lodge penalty is based on penalty units ($364 per unit from 1 July 2026), accruing per 28-day period. Incorrect information penalties range from 25% to 75% of the tax shortfall depending on whether the behaviour was careless, reckless, or intentional. Proactive voluntary disclosure before an audit significantly reduces the penalty applied.
What is the difference between tax avoidance and tax minimisation?
Tax minimisation is the legal arrangement of your affairs to reduce tax within the law — claiming all eligible deductions, using appropriate structures, and timing income and expenses. Tax avoidance involves arrangements that achieve outcomes parliament did not intend. The ATO can apply Part IVA anti-avoidance rules to cancel benefits from avoidance arrangements.
