The government has proposed to change the current requirement for employee superannuation contributions from quarterly to each payday. Superannuation contributions will need to be paid and received by their superfund within 7 days of each pay run. For example, if you pay your employees fortnightly, this means you will also need to pay their superannuation fortnightly.
The new measures are not planned to commence until 1 July 2026.
For those clients using the ATO small business superannuation clearing house (SBSCH), it has also been announced that this service will be discontinued. Ultimately all businesses will need to ensure they have compliant payroll software that can process both wages and superannuation payments each pay run.
This change will impact many businesses cashflow. Whilst we are not advocating a business should be funding itself using employee superannuation contributions, the reality is that if your customers are paying you in 30-60 days and your employees, tax office and suppliers are required to be paid before this, your business will need to ensure it has sufficient working capital to fund this gap.
The proposed 7 day requirement for payment of employee wages and receipt by the employees superannuation fund may be difficult in practice for many who use clearing house type arrangements. Employers have no real control over how long the clearing house may take to make these payments to the individual superannuation funds. We are hoping that further changes to the proposal will address this issue.
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