Nick Bruining: Employers will face massive ATO penalties for late payments when payday super arrives in 2026

Employers have been put on notice to ensure compulsory superannuation payments are on time, as new details emerge about the rollout of “payday super”. While it is some time off, the Australian Taxation Office has released a fact sheet targeting employers and employees to explain how the system will work when changes kicks in on July 1, 2026. By all appearances, the ATO intends to upgrade its penalty regime from a domestic claw hammer to a 5kg rock breaker. Under current arrangements, compulsory super guarantee payments must be in a member’s account within 28 days of the end of the quarter in which the liability occurred. That requirement extends to voluntary concessional contributions such as salary-sacrificed amounts as well. It means, for example, an employee who salary-sacrificed $200 from their fortnightly pay in addition to their employer’s $250 compulsory super payment in the first pay cycle for October this year might not see that amount paid into their super account until January 28 2025. In a nutshell, it means the member misses out on investment returns for up to four months. There is no obligation for an employer to pay interest on the money held while it’s waiting to be paid to a member’s fund. From July 1 2026, however, employers will be required to make the compulsory superannuation contributions on the same day as staff are paid. Only seven days grace will be allowed for the payment to actually appear in the member’s account, allowing time for the payment to work through the system. “An employer will be liable for the new superannuation guarantee charge unless SG contributions are received by their employees’ superannuation fund within seven calendar days of payday,” the ATO’s fact sheet states. That charge will be a form of penalty applied to errant employers who fail to pay the correct amount of compulsory super or who are late to pay. The new charge includes the shortfall amount, plus notional interest calculated daily and based on the ATO’s general interest charge rate. That rate is currently 11.36 per cent, and changes quarterly. Added to this is an administrative uplift of up to 60 per cent of the shortfall amount. Once the ATO determines the total payable, the outstanding debt can be subject to a further interest charge — but this time, compounded daily — and a further penalty of up to 50 per cent. None of these penalties are tax-deductible and, in line with other debts like this, directors of companies are individually liable. The ATO said it would work with employers in the lead-up to the new system starting by monitoring the existing practices of businesses making superannuation payments. ATO systems will match Singe Touch Payroll data with contribution reports provided by the super funds receiving the payments. “This visibility will allow the ATO to proactively identify missing or late SG payments and intervene sooner to ensure employers can get back on track with their superannuation before problems escalate,” the ATO said. Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association