Fortifying governance for successful transition

Employers should begin by establishing a clear understanding of their current governance framework across all aspects of the superannuation lifecycle – not just limited to remittances.  

Once the current frameworks are clearly understood and documented, organisations should seek to adapt to support a payday‑aligned environment, where ongoing precision needs to become standard practice from the moment an employee (or SG‑eligible contractor) joins the organisation to adhere to the seven‑day “able to be allocated” requirement. 

This involves establishing clear protocols within the superannuation lifecycle relating to: 

• Pre-engagement (e.g. are there clear and established frameworks that exist to determine if a prospective contractor is SG-eligible?) 
• Onboarding (e.g. onboarding principles should require complete, correct, and allocable superannuation data before the first pay run, early stapled fund checks, and clear criteria for proceeding with a pay run if data is incomplete) 
• Payroll processing (e.g. establishing testing protocols for first-pay scenarios, and having escalation pathways in place to manage inadvertent data issues that can be avoided upfront to prevent downstream SG compliance risks) 
• Superannuation remittances and rejection management (e.g. who within the organisation is responsible for following up the relevant employee) 
• Error escalation (e.g. connectivity between payroll, tax and finance to manage and report errors to the ATO, if required) 

Adapting existing governance frameworks for Payday Super will also require consideration of technology changes that have been initiated to improve functionality of the superannuation ecosystem. That is, the ATO and software providers (including payroll providers, clearing house and gateway providers, etc.) are preparing to introduce enhancements and implement measures to support the upcoming changes – notwithstanding, employers will need to consider their ability to embed and operationalise these into their ongoing business frameworks. Some examples of these include:  

• Determining how pre-pay run checks can be uplifted by leveraging the new Member Verification Request feature to validate the superannuation information provided by employees 
• Reviewing current superannuation choice and stapling options for employees as part of onboarding workflows, in consideration of the potential legislative and associated system change (which would allow a stapling request to be made before, at or after the time the employee is given a standard choice)  
• Reinforcing synchronisation and integration controls between HR Information Systems, payroll, and payment channels in order to prevent anomalies or address ‘errors’ in real-time (including in the consideration of the streamline SuperStream ‘error’ reporting) 
• Reviewing post-pay run reconciliation practices between Single Touch Payroll (STP), payroll, and payment data and ensure that these are supported by structured exception management and a feedback loop for quality improvement (including with respect to the proposed reporting of ‘Qualifying Earnings’ in STP per employee), and 
• Revisiting code and system configurations in the payroll system (including for shifts from ‘Ordinary Time Earnings’ to ‘Qualifying Earnings’ and changes to capping) 

Given the various dependencies that contribute to a successful and seamless superannuation lifecycle, from pre-engagement through to error escalation, the changes highlight a need for governance to shift from “best practice” to critical infrastructure.  

In preparation for the changes, the focus should not only be on operationalising and developing governance across technology – rather, organisations should also look at the surrounding processes and people/resource utilisation including: 

• Ensuring clarity around roles and responsibilities across payroll, finance, HR and shared services by documenting the necessary hand offs, approval processes and resolution/escalation protocols  
• Documenting processes and the aligned roles and responsibilities, to be able to demonstrate appropriate oversight to regulators, auditors and boards 
• Collaborating with external vendors such as superannuation clearing houses, financial institutions and payroll software providers to establish confidence that existing processes and systems can support more frequent contribution cycles or will be uplifted to do so, and 
• Reducing the risk of SG underpayments, compliance breaches, or reputational damage by reviewing and uplifting existing controls, checks and reviews – shifting to a more proactive approach in detecting exceptions and anomalies.  

With the above in mind, cross‑department coordination becomes critical for compliance with Payday Super. Each function plays a key role in the end‑to‑end superannuation lifecycle, and issues in one area will quickly have a flow on impact to others. For example:   

• HR is responsible for onboarding and ensuring that superannuation data is accurate, complete, and allocable. Where HR data is incorrect or incomplete, the error passes immediately to payroll under the new model. 
• Payroll relies on the information provided by HR. Even if payroll processes are robust, the quality of outcomes depends on the accuracy of the data they receive. However, Payroll, likely in concert with IT, will be responsible for implementing and testing system updates and functionality (e.g. capping changes, Member Verification Request, STP reporting of Qualifying Earnings, etc.) 
• Finance may be responsible for processing payments and managing bounce‑backs. If finance is not aligned with the shortened timeframes or unaware of the payroll‑to‑payment lifecycle, delays or missed deadlines can occur. 
• Tax and governance teams must oversee and monitor compliance, reporting obligations, and error escalation. 

Payday Super represents a fundamental mindset shift. For decades, SG has been assessed at a quarterly cadence, with long lead times for remediation, reconciliation, and exception management.  

Under Payday Super, employers will be required to calculate and pay SG roughly at the same time they pay employees—significantly increasing frequency, oversight pressure, and accuracy expectations. Organisations that strengthen their governance frameworks now will be better positioned to manage increased scrutiny, avoid costly compliance issues, and enable a smoother operational transition.  

Our Workforce team is working with employers to assess their preparedness, uplift governance, and prepare for implementation. If you would like assistance in reviewing your current frameworks or designing a roadmap for Payday Super, reach out to our team.