Payday super checklist for employers – steps to stay compliant

From 1 July 2026, employers must pay their employees’ superannuation guarantee (SG) contributions at the same time as salary or wages. This new system is known as payday super.

Currently, most employers pay super on a quarterly basis. From July 2026, super will instead need to be paid each pay cycle.

The ATO has released a checklist to help employers prepare for this change. Below is a straightforward guide outlining what small businesses should be doing now to get ready.

If you’re an employee, this article explains what your employer will need to do on your behalf from 1 July 2026. The aim of these changes is to ensure super is paid more frequently and reaches your super fund sooner.

Now: Understand the new requirements

– From 1 July 2026, SG contributions must be paid on every payday

– SG contributions must generally reach employees’ super funds within 7 business days after payday

– Super will be calculated using a new concept called “qualifying earnings”, so it is important to understand what this covers. In simple terms, qualifying earnings include an employee’s ordinary time earnings (OTE) – that is, payments for ordinary hours of work, as well as certain types of paid leave, allowances, bonuses and lump sum payments. Qualifying earnings also include commissions, salary sacrificed amounts to super, and payments made to workers captured under the expanded definition of employee, such as independent contractors who are paid mainly for their labour

February to March 2026: Plan and prepare

– Decide how your business will move from quarterly payments to payday payments

– Speak to us as your trusted accountant or payroll provider if unsure about how to transition to payday super 

– Review how paying super more often will affect your cash flow and update your cash-flow forecasting and budgeting processes accordingly (we can help with this)

– Make sure all employee super fund details are correct and confirm member account numbers and unique superannuation identifiers are up to date to prevent any errors

– Fix any warning messages you receive from your employees’ super funds as incorrect details may cause payments to be rejected after 1 July 2026 causing a late payment

April to June 2026: Lock in your plans

– Confirm your payroll software will be ready for payday super

– If using a clearing house, check it can support payday super and whether updates are required☐ If currently using the ATO Small Business Superannuation Clearing House (SBSCH), transition to an alternative clearing house provider before 1 July 2026, as the SBSCH will cease operating from that date.

– Download and retain all SBSCH transaction history before 1 July 2026. Once the service permanently closes, records will no longer be accessible. These records may be required in the future to respond to ATO reviews, audits or employee enquiries

– Put a process in place to quickly fix any SG contributions payment errors 

– Allow enough time for SG contributions to clear so the super fund receives the contribution within 7 business days after payday

– Keep clear records of all super payments

– Pay SG contributions for the January – March 2026 quarter by 28 April 2026

1 July 2026: Payday super starts

From 1 July 2026, payday super takes effect. To meet the new requirements, employers must:

– Pay SG contributions in full, on time and to the correct super fund. Failure to do so may result in penalties, including the superannuation guarantee charge (SGC), which can exceed the original super amount owed

– Ensure SG contributions are received by and allocated to employees’ super funds within 7 business days of each payday

– Calculate SG contributions based on qualifying earnings

– Report qualifying earnings and SG liabilities via STP-enabled software

– Pay the final quarterly SG contribution for the April – June 2026 quarter by 28 July 2026

– Note that the SBSCH cannot be used for any payments made on or after 1 July 2026, and no late payment offset will apply for that final quarter.

Final reminder 

Start preparing early by checking that payroll software is ready, reviewing cash flow and confirming employee super details are correct. Payday super is a significant change, but with proper planning the transition can be smooth. If you are uncertain about how the new rules will affect your cash flow or payroll processes, please contact us – we are here to help ensure everything is in place before the July 2026 start date.

Forgiveness of a debt – What are the tax consequences?

If you are owed money and you forgive that debt, potentially there are some important CGT consequences. This is because the debt owed to you is a “CGT asset” in your hands and its forgiveness gives rise to a “CGT event” – potentially resulting in a capital loss to you (as calculated by reference to the value of the debt owed to you).

This typically occurs where you forgive the debt because the debtor does not have the capacity to repay and the debt has no value at all. On the other hand, where the debt is forgiven, but the debt could be repaid to a greater or lesser extent, then the amount of the capital loss will be reduced accordingly. 

However, crucially, the tax law excludes from this, those debts which are not connected with any income producing activity or business – that is, essentially, debts of a “private nature” which typically arise between family members and friends (and even, possibly, in relation to dealings with a family company).

On the other side of the coin is the person who does not have to repay the debt (“the debtor”). In this case, there is no taxable gain to the person because they have not derived income or made a gain. Rather, they have merely had their obligation to repay the debt relieved or extinguished by the forgiveness of it.

Nevertheless, there can be tax law consequences to the debtor in this case.

But once again, there is generally a carve out for debts that do generate assessable income – that is, “non-commercial” debts where either no interest charged or any interest charged on the debt would not have been deductible to the borrower/debtor. 

Again, such debts typically arise between family members and related parties.

However, on the other hand, where interest is payable on the debt is and would be deductible to the debtor then the tax rules come into play. And this includes the situation where interest is not charged but, if it had been it would have been deductible to the debtor.

This may arise in various situations and where it does the “commercial debt forgiveness” rules in the tax law come into play.

While these rules do not result in the debtor making any taxable income or gain, they do require the debtor to reduce some existing “tax advantages” they may have by the amount of the debt forgiven. 

These tax advantages may include any prior year tax losses or capital losses that they could otherwise carry forward to reduce tax they may have in the future.

Likewise, it can also include the value of depreciable assets that would otherwise give rise to deduction for depreciation used.

Suffice to say these commercial debt rules are quite intricate – even in terms of working out if such a debt exists in the first place. Likewise, the CGT rules that apply to the creditor on forgiving a debt require close consideration.

So, if you are a debtor or creditor in any debt forgiveness scenario (or are thinking of forgiving a debt), you must come and speak to us about the possible tax consequences – including those that maybe advantageous to you. 

Buying a new home before selling and the old impacts on CGT

If you find yourself in the position of having bought yourself a new home before you sold your existing home, there are important CGT issues to consider – and these centre on the fact that under the CGT rules, you cannot have two or more CGT exempt homes at the same time. 

However, there is an important concession that allows you to treat both the new home and the existing home as exempt from CGT for up to a period of six months – provided the new home actually becomes your main residence. 

So, for example, in the simple case where you bought your new home on 1 February 2026 and then sell your existing one five months later on 1 July 2026, your existing home won’t be subject to any CGT – and your new home won’t lose any CGT exemption for this five month period.

However, the availability of this concession is subject to a number of important conditions. 

Firstly, the existing home must have been your home for a period of at least three months in the 12 months period before you sold it. And, secondly, it must not have been used for the purpose of producing taxable income in any part of that 12 month period when you did not live in it.

So, in the above example, if you rented your existing home in the five month period before you sold it (which vendors sometimes do while waiting to sell it), you could not use this concession to give you an additional five months of exemption on that home.

As a result, you will be subject to a partial CGT liability to reflect the fact that your dwelling could not be treated as a main residence during this five month period. 

(But if this was the first time you rented it and it would otherwise have been entitled to a full main residence exemption just before you rented it, then you would calculate this partial CGT liability by reference to its market value when you first rented it and the amount you sell it for.)

However, the stringency of these conditions about the use of your existing dwelling in the 12 month period before you sell it can be alleviated by using another concession (the “absence concession”) to continue to treat it as your main residence, even if you rent it in this period.

In a similar fashion, you can use another concession (the “building concession”) to treat any land you acquire on which to build a new home as your new home for the purposes of this six month overlap rule.

However, in both these cases the application of these particular concessions, and their interaction with the rule that allows you to treat an existing home and new home as CGT exempt for up to six months, can be quite complex. And much will depend on the precise facts of the case.

If you find yourself in the position of having bought yourself a new home before you sold your old one (or are intending to do this) come and speak to us – and we will show you how the rules operate in your circumstances, and how they can be applied most advantageously. 

Six changes impacting your super in 2026

Superannuation rules are always evolving, and 2026 is shaping up to be another year of important changes. Some of these updates may only affect a small group of people, while others could impact almost everyone with super.

Whether retirement feels a lifetime away or it’s already on the horizon, understanding what’s changing can help you make smarter decisions and avoid costly mistakes. Here are six key changes to keep on your radar.

1. Possible tax changes for large super balances

One of the most talked-about changes is the government’s proposal to increase tax on large super balances, also known as Division 296 tax.

Here’s how it’s expected to work (if the legislation passes):

It’s important to note:

If this may apply to you, the best approach is patience. Wait until the rules are final and get professional advice before making any big moves.

2. Payday super is locked in 

One change that is definitely happening is payday super.

Currently, employers only have to pay super at least once every three months. From 1 July 2026, that changes.

Under the new rules:

This is good news for workers. Paying super more frequently means:

If you’re an employer, now is the time to start preparing for these changes ahead of their commencement on 1 July 2026. Reviewing your payroll systems and internal processes early will help ensure a smooth transition. This may involve speaking with your payroll software provider, accountant, or registered tax professional to confirm your systems are compliant. If you need support, we’re here to guide you through the process and help you get ready with confidence.

3. Contribution caps are expected to increase

Thanks to rising wages, super contribution limits are expected to increase from 1 July 2026.

While final confirmation depends on official figures released in late February 2026, the changes are widely expected to be:

These caps are linked to wage growth, and based on recent data, it would take a significant and unlikely drop in wages for indexation not to occur.

This change could create opportunities for:

Once the new caps are confirmed, we’ll let you know and help you understand what they mean for your super strategy.

4. Transfer balance cap: what’s happening next?

The transfer balance cap (TBC) limits how much super you can move into a retirement-phase pension. Unlike contribution caps, the TBC is indexed to inflation (CPI) rather than wages.

Based on the latest December CPI figures, the TBC is set to increase from $2 million to $2.1 million from 1 July 2026. 

This change will mainly affect people who haven’t yet started a retirement pension. If you already receive a retirement pension from your super, you may still benefit from a partial increase, depending on your individual circumstances and how much of your cap you’ve already used.

5. More flexibility for legacy pensions

Good news for people stuck in older super pension products.

New rules now allow greater flexibility for certain legacy pensions, such as lifetime, life expectancy and market-linked pensions held in SMSFs.

Previously, these pensions:

Under the new rules:

Because legacy pensions are complex, professional advice, especially from an SMSF specialist, is strongly recommended before making changes.

6. Better fund performance, transparency and tech

Large APRA-regulated super funds continue to face increased scrutiny, and that’s a win for members.

In 2026, expect to see:

At the same time, technology is transforming how we interact with super. Many funds are rolling out:

If you haven’t logged into your super account lately, 2026 is a good year to start.

Final thoughts

Superannuation is a long-term game, and even small rule changes can have a big impact over time.

Take the time to review your super, stay informed about potential changes, and consider speaking to a financial adviser if needed. With the right knowledge and strategy, you can make sure your super keeps working hard for your retirement. 

Surviving an ATO audit

This piece is aimed at self-employed clients, so if you’re a salary earner or a retiree you can safely move on to the next item.

For others, it goes without saying that at tax time you should disclose all your assessable income and only claim legitimate business deductions. Failure to do so exposes you to the risk of penalties and interest on top of the underpaid tax.

And the chances of popping up on the ATO’s radar are not negligible. It runs an active small business compliance program that uses industry benchmarks and other information, including “dob ins” received from community members.

Cash jobs

Offering a discount for cash for a lower price might seem tempting, but it suggests an intention of under reporting income. Tradies and the like occasionally fall out with their clients, some of whom might then report them to the ATO and those “dob ins” can lead to audits being conducted. The practice remains widespread, but you should avoid doing cash jobs – there’s a good chance they will come back to bite you.

Benchmarks

The ATO keeps extensive data of industry benchmarks for many industries, tracking gross income, expenses and profits margins. Its website suggests this data enables you to see how you compare with your peers and perhaps identifies areas for improvement. But it also gives the ATO a way of identifying potential audit cases.

If your trading results are well below the industry average, you might want to think about what some of the reasons for that might be. These could include:

Averages are just that, and some businesses will be under while others are over. Having an idea of where you sit on the spectrum and why may help you engage with the ATO if and when the time comes.

Lifestyle factors

Another way of identifying cases suitable for audits is for the ATO to assess whether your lifestyle matches the net income disclosed in your tax returns.If you drive a flash car, take expensive holidays, have your children in private schools, have had major home renovations done or get around wearing expensive watches whilst your disclosed income doesn’t support that level of spending, you might have some explaining to do.

The audit

If, for whatever reason, the ATO isn’t satisfied that the taxable incomes you have disclosed are correct, they can make their own estimate using whatever information is available. Any amended default assessments will generally be based on a bank account analysis, as well as estimates of private spending. They can’t just pluck a figure out of the air, but they don’t have to prove where the discrepancy came from either.

Those without complete and accurate records of both their business and private finances are vulnerable to adjustments that involve double counting, especially from a bank analysis that assumes that every unexplained deposit represents undisclosed income and every unexplained withdrawal was used to fund private expenditure. As often as not the two are offsetting but the taxpayer can’t prove it.

To challenge a default assessment a taxpayer has to show not only that the ATO’s estimate is wrong in some respect – they also have to show what their correct taxable income is. The courts and tribunals are littered with default assessment cases where the taxpayer has failed in this regard, leaving them with a very large tax bill.

Protective measures

Here are some of the practices that might assist you in an ATO audit. Most of them would need to be in place before an audit even starts:

Come and see us to help get you ready for an ATO audit (or avoid one altogether).

Could you be missing out on thousands in lost super?

Most of us keep a close eye on our bank accounts. But superannuation can be easier to lose track of, especially if you’ve changed jobs, moved house, changed your name, or simply set up a new fund and assumed everything followed you.

That’s why the Australian Taxation Office (ATO) has issued a timely reminder. There is now $18.9 billion in lost and unclaimed super sitting across Australia. That’s up $1.1 billion since 2024 and spread across just under 7.3 million accounts. 

In other words, a lot of Australians have retirement savings that aren’t currently working for them and some of it could be yours.

What “lost” or “unclaimed” super actually means

Super doesn’t vanish, but it can go missing from your radar. It typically happens when an account becomes inactive and your super fund can’t contact you, or when you end up with multiple funds over the years.

The ATO also holds certain amounts of super on behalf of individuals, for example, small inactive balances that have been transferred to the ATO, or other unclaimed amounts.

The average amount of lost or unclaimed super is around $2,590 per person. That might not sound life-changing today, but over time it can grow into tens of thousands by retirement.

A special note if you have an SMSF

If you have an SMSF, this ATO update is particularly worth paying attention to. When you established your SMSF, you might have transferred most of your super across, but kept some behind, for example, to retain insurance cover through another fund. That means there could still be older super accounts from past jobs or retail/industry funds sitting in your name.

The ATO is urging SMSF members to do a check, because a share of the $18.9 billion in lost and unclaimed super might be yours and could be rolled into your SMSF.

One important practical tip is that if you locate lost super and want to move it into your SMSF, but your SMSF doesn’t show up as a transfer option in ATO online services, it’s often due to the fund’s compliance status. Take a moment to confirm your SMSF is listed as “complying” or “registered” on Super Fund Lookup.

How to check for lost super (it only takes minutes)

The ATO has made this super simple (pun intended!). You can:

  1. Log in to myGov and go to ATO online services
  2. Navigate to the Super section to view:
    • Super held by the ATO
    • Any lost or unclaimed accounts
  3. Request a transfer to an eligible super account. 

Even if you don’t find anything, you’ll at least know everything is where it should be.

Simple habits that help you stay on top of super

Finding lost super is great but preventing it from happening at all is even better. A few easy habits can make a big difference:

Why acting now matters

Since 2022, the ATO has already reunited Australians with about $5.5 billion in previously unclaimed super. But there’s still nearly $19 billion waiting to be found. 

A few minutes today could translate into a healthier retirement balance later.

Final word

It’s easy to put super in the “deal with it later” basket, but it’s still your hard-earned money. If you want a hand finding lost super, combining accounts, or moving money into your SMSF, reach out to us. We can guide you through the steps and make sure you’re able to claim any lost super without any hassles.