What Payday Super non-compliance could cost your practice
With Payday Super taking effect on 1 July 2026, it's worth understanding that this reform doesn't just change how often you pay superannuation. It also introduces stricter penalties that will apply every pay cycle.
This article explains the potential consequences of late payments, key factors that can delay payments and the Australian Taxation Office's (ATO) compliance approach.
What happens when a payment is late under Payday Super?
From 1 July 2026, superannuation contributions must be paid every time you pay wages, rather than every quarter as under the current rules. This could mean paying contributions weekly, fortnightly or monthly, and they must arrive in your employee's superannuation fund within seven business days of payday.
If payments don’t arrive within that time frame, your practice becomes liable for the new Super Guarantee Charge (SGC). This includes the amount of super you owe as well as notional earnings (interest calculated on the unpaid amount) and an admin fee.
Unlike ordinary superannuation contributions, the SGC and any associated penalties are not tax-deductible. Additional penalties can apply if you fail to pay the SGC promptly after receiving an ATO notice, or if your practice has a history of late payments.
The seven-day deadline is tighter than it looks
It’s important to factor in the time it could take for the specific processes required to transfer payments to employees’ super accounts.
Bank transfers can take several business days, and your payment provider can add further processing time. This can increase the risk of making a late payment.
This is why your systems and processes matter as much as your awareness of the rules. A practice that relies on manual, reactive payroll management can increase the risk of late payments.
Reporting obligations are also changing
Payday Super isn't only about payment frequency. From 1 July 2026, how your practice reports through Single Touch Payroll (STP) will also change. You'll be required to report both qualifying earnings and super liabilities to the ATO with every pay cycle, not just one or the other as currently permitted.
Payroll systems that aren't updated to capture and report this data correctly can create compliance gaps, even if payments themselves are being made on time.
ATO’s compliance approach during the transition period
The ATO has said that businesses who “try to do the right thing” and “resolve issues quickly” in the first year of Payday Super “should not be the focus” of its compliance actions.
In practice, this means businesses that make genuine, documented efforts to comply, update systems, address issues as they arise and maintain clear payment records, will be viewed differently to those that aren't engaging with the changes at all. However, this should not be read as a reason to delay preparation.
How Avant Practice Solutions can help
Our Bookkeeping and Payroll service is designed specifically for healthcare practices. Our team understands the complexities of medical payroll and can help ensure your super obligations are met accurately and on time, every pay cycle.
From processing payroll and managing super lodgements to STP compliance and EOFY reporting, we take care of the detail so you can focus on your practice.
Book a meeting with our team today to find out how we can help you prepare for Payday Super with confidence.
The information in this article does not constitute legal, financial or other professional advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. Persons implementing any recommendations contained in this article must exercise their own independent skill or judgment and seek appropriate professional advice relevant to their own particular circumstances. Compliance with any recommendations will not in any way guarantee discharge of the duty of care owed to patients and others coming into contact with the health professional or practice. Avant Practice Solutions and its related entities are not responsible to any person for any loss suffered in connection with the use of this information. Information is only current at the date initially published. © Avant Mutual Group Limited 2026.