On 9 October 2025, the Federal Government introduced Payday Super legislation into Parliament, confirming a 1 July 2026 start date. Our recent article explored some of the key consequential changes to the Superannuation Guarantee (SG) regime and regulatory settings designed to support a payday-aligned SG environment.
The ATO released Draft Practical Compliance Guideline PCG 2025/D5 (the Draft PCG), setting out its intended compliance approach for the first 12 months of Payday Super, and continues to release updates informing employers of Payday Super.
With just under eight months until the start date of 1 July 2026, and with the ATO’s intended compliance approach now in view—employers should prioritise ‘readiness’—commencing with a deepened understanding of their current superannuation lifecycle and augmenting the same—so systems are set for go-live. Proactive preparation will best position employers to achieve a ‘low risk’ rating in accordance with the Draft PCG—as well as access potential remission of administrative penalties if a SG shortfall is identified.
What employers should be doing now to be Payday Super ‘ready’
For many employers, Payday Super represents a fundamental shift in superannuation compliance with implications across payroll, tax and broader functions. To manage the change smoothly, we recommend employers adopt a phased approach to ‘readiness’ that starts with better understanding and documenting the current SG governance, enabling leverage of existent frameworks for future compliance in a Payday Super environment.
Phase 1: Current state analysis
Payday Super will require a material change to an organisation’s existing SG governance framework. As such, it is paramount that organisations seek to understand, document and assess the current end-to-end SG lifecycle across resources, systems and processes—from employee onboarding and payroll calculations to contribution remittance and error handling.
For example, does your organisation currently cap superannuation and if so, how is the payroll system configured to enable capping? From a remittance perspective, what are the current service agreements and terms & conditions with the clearing house?
Phase 2: Future state transition
Once the current state has been assessed and documented, organisations should consider how the framework can be augmented to accommodate a Payday Super environment. Some examples of critical focus activities include:
- The onboarding and ‘choice’ process
- How will the current onboarding timing and non-information scenarios (where employees do not submit information in a timely manner, including a ‘choice’ form) be revised for a Payday Super environment?
- Will the current contractor onboarding/procurement process be reframed for Payday Super (noting Payday Super extends to contractors who are subject to SG)?
- Entitlement calculation
- How will the change to the quarterly maximum contributions base be configured in your payroll system?
- With the removal of late payment offsets, how will errors or late payments be managed for ongoing payroll?
- Enhanced reporting
- Are there any pay codes that consist of both superable and non-superable components—how will these be configured for reporting to the new Single Touch Payroll (STP) element (‘Q’ - Qualifying Earnings)?
- Contribution timing
- What internal processes within your organisation will be revised to ‘quicken’ internal processing (e.g. approval, data validation) for contributions remittances?
- What are the Payday Super revisions to your organisation’s arrangements with its clearing house, including for streamlined error messaging?
- Managing ‘rejections’
- How will resources and processes to investigate and remedy ‘rejections’ be managed under Payday Super, including in consideration of longer periods available for some instances?
Phase 3: Real-time testing and refinement
Once employers have designed their future state governance processes, it is essential to perform ‘dry run’ testing prior to the go-live date to highlight any operational or process delays, system issues or resourcing constraints—to ensure that the future state will work as intended. For example, where governance in relation to ‘rejection’ management has been revised, is this operating as expected?
In addition, the ATO has clearly outlined its approach to targeting the $5.2bn SG gap through advanced data matching and analytics under Payday Super. Employers should prepare for this initiative by examining, on a real-time basis, their own data to identify any issues before the ATO’s systems do. Ideally, this systematic testing should be ‘baked into’ the ongoing payroll processes to ensure ‘real-time’ testing (and rectification, if required).
As an example, using PwC’s proprietary software, Workforce Automate, employers are able to compare: payroll superannuation calculations with SG obligations; alignment to STP reporting; and conformity of remittances at an individual level. These analytics often stress-test scenarios prone to errors, such as misclassified payments (e.g. allowances or bonuses omitted from SG), high-income earners’ super being incorrectly calculated against capping, and/or events that can cause late payments (such as onboarding new starters).
In a Payday Super environment, by maintaining measures to conduct real-time monitoring and performing timely contributions to offset shortfalls, employers can demonstrate good faith and significantly mitigate penalty exposure.
Key takeaways
Whilst the law has yet to be passed by Parliament, this is not a reason to pause ‘readiness’—it is an opportunity to get ahead. Employers should use this window to hone their ‘readiness’ plan, commencing with assessing and mapping current-state, leveraging that understanding to implement future state transition, and then testing the future state (including deploying real-time data analytics) prior to 1 July 2026.
Employers that embrace ‘readiness’ early will not only avoid the last-minute rush; they will build trust with their workforce and the ATO by demonstrating that they take superannuation obligations seriously, every payday. This is clearly articulated in the ATO’s risk zones under the draft PCG covering year 1 Payday Super compliance enforcement.
If you have any further questions about Payday Super, please reach out to your PwC Workforce advisor or visit our Payday Super website to stay informed with Payday Super developments. In addition, please register for our Workforce Leaders Forum: What does Payday Super readiness look like?.
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