14 Oct

ATO Releases Draft Guideline on Payday Super – What It Means for Employers

The Australian Taxation Office (ATO) has just released Draft Practical Compliance Guideline PCG 2025/D5, outlining its proposed compliance approach for the first year of the Payday Super initiative, set to commence on 1 July 2026. [ato.gov.au]

What is Payday Super?
Payday Super is a reform that will require employers to pay their employees’ superannuation contributions at the same time as wages, rather than quarterly. This change aims to improve retirement outcomes by ensuring super is paid more frequently and on time.

ATO’s Compliance Focus (2026–2027)
The draft guideline provides clarity on how the ATO will assess employer compliance during the first year of Payday Super. Employers will be categorised into low, medium, or high risk zones based on their contribution behaviour. Examples include:

• Low risk: Employers who make all eligible super contributions on time, even if some are rejected and reprocessed.
• Medium risk: Employers who make full contributions but with some delays or without changing contribution frequency.
• High risk: Employers who underpay or miscalculate contributions, resulting in shortfalls.

Why This Matters to You
As your trusted bookkeeping partner, we want to ensure you’re prepared for this shift. Timely and accurate super payments will be more critical than ever. The ATO has indicated a supportive approach during the transition, but businesses should start reviewing payroll systems and processes now to avoid falling into higher risk categories.

Next Steps
We recommend:

• Reviewing your current super payment processes.
• Ensuring your payroll software can support Payday Super requirements.
• Speaking with us about how we can help you stay compliant and avoid penalties.

If you have questions or want to prepare early, reach out to our team — we’re here to help you navigate these changes smoothly.