Payday Super
Legislation was introduced on 9 October 2025 in relation to the core changes regarding superannuation guarantee obligations and the super guarantee charge. Also confirmed was previously announced start date of 1 July 2026.
We are expecting further changes to come via regulations and additional bills that were outlined in the initial government fact sheet and exposure draft law.
Stapling and advertising bans are not off the table; our understanding is that these will look to be introduced in a subsequent bill.
Regulations are expected to be released soon in relation to other elements such as returning contributions – if a contribution is unable to be allocated and needs to be returned, this will need to happen in 3 business days, rather than the existing 20 business days.
Members were reminded that as of today, Payday Super is not yet law. While it has been introduced and read for a second time, we do not know any further timeframes or information as to next steps for its progression through the legislative process.
After the exposure draft and the introduced bills, there are several noticeable changes that were made because of the consultation feedback. Treasury have published a summary of the outcomes of exposure draft consultation PDF 212KBExternal Link and the key changes on their website.
Members clarified the meaning of a business day, given the change from 7 calendar days to 7 business days between the exposure draft and the bill. The meaning of 'business day' is consistent across the country. For example, if any state or territory has a public holiday this is not a business day.
A question was posed regarding regional public holidays. Clarification was provided that from the introduced Bill, business day means a day other than:
- a Saturday or a Sunday; or
- a day which is a public holiday for the whole of
- (i) any State; or
- ii) the Australian Capital Territory; or
- (iii) the Northern Territory.
Any extended dates also change to business days. This applies to the new extended 20 business day due date for any situation where an employer needs to make a contribution to a fund for the first time for an employee, not just new employees.
Compliance approach for the first year
Draft guidance has been published on the ATO’s employer compliance approach for the first year of Payday Super. Draft Practical Compliance Guideline PCG 2025/D5 Payday Super – first year ATO compliance approach recognises that employers who try to do the right thing from 1 July 2026 to 30 June 2027, and resolve any issues quickly, should not be the focus of ATO compliance action.
The ATO Corporate plan
Our Corporate plan has been released, and it lists Payday Super as an enterprise priority, which highlights the importance that the ATO is placing on the implementation of Payday Super.
This is a significant reform to the superannuation system and will require all participants in the ecosystem (including superfunds, digital service providers (DSPs), gateways and over 950,000 employers) to make changes in parallel to ensure success.
Leadership structure in relation to Payday Super has changed with Emma Rosenzweig the Deputy Commissioner of the Payday Super Program and Ben Kelly the Deputy Commissioner for the Superannuation and Employer Obligations Business Line.
Payday Super – SuperStream improvements
To support the readiness of Payday Super we are making several updates to SuperStream, expected to apply from 1 July 2026 including:
- The requirement for funds to accept fast payments via the New Payments Platform (NPP) by 1 July 2026.
- Updates to error messaging so it is timely, clearer, and more meaningful. This will give employers better information to help them resolve errors.
- A new SuperStream Member Verification Request (MVR) message for employers to verify employee’s fund details are correct and the fund will accept a contribution. This is a significant change that aims to give employers confidence that there is less risk of rejected payments.
- Changes to Fund Validation Services (FVS) to increase the visibility and traceability of changes or closures to unique superannuation identifier (USI).
Under the Contribution User Guide V3, MVR should be used to verify an account in the following scenarios:
- a nominated fund by an employee through choice
- change in an employee’s choice of fund
- following a product closure or merger
- change in payroll or registry systems where agreement has been provided by the fund
- as part of corrective action following a rejected contribution from a fund
- where there are changes to employee information, such a tax file number, date of birth and name.
An employer, or their provider, will be advised they should not use the MVR to support regular contributions processes. The ATO will look at include content on the employers’ page on ato.gov.au to clarify this as part of the SuperStream changes.
With funds having less time to match employee information to a members account, reducing to 3 days, down from 20, it is important employers do as much as possible to have accurate and complete information to avoid errors.
From 1 July 2026, the FVS services will be upgraded to include new information like:
- new data to capture the reason a USI is closing
- where the closure is due to a Successor Fund Transfer or Intra-fund Transfer, funds will also be required to provide the Australian business number and USI of the receiving fund
- whether a USI is ready to receive fast payments and a PayId (if applicable)
- rationalised contact information for support with SuperStream processing issues
- new certification value to support response messaging as part of closing a USI.
A new FVS get service will also include closed USI details to help employers trace fund changes. The new FVS get service will be available alongside the current FVS get service for 12 months.
New versions of the 'update and get services' will be available in our External Vendor Testing Environment (EVTE) from 17 October 2025. The new version of the FVS bulk service will be available in EVTE from December 2025.
Technical and business guidance documents on these changes are available on the Contribution standard v3.0 page on the software developer’s website. DSPs should review these specifications now and begin planning their implementation strategies with their employer and super fund clients to ensure compliance by the 1 July 2026 deadline.
Small Business Superannuation Clearing House
The Small Business Superannuation Clearing House will be retired from 1 July 2026 and new users to the service have been unable to register from 1 October 2025.
We are encouraging employers to transition to alternative services prior to this time.
While the ATO cannot recommend a service, we will be guiding employers to information that will help them consider the options that best suit their business needs.
This includes options within their existing payroll software, super fund clearing houses or online payroll systems, a variety of which can be found on the SuperStream Product registerExternal Link, which contains a listing of payroll and clearing house products.
If DSPs have a product listed on this register, we are encouraging them to review the accuracy of the product information on the register. You can also have new products added to the register by contacting the DPO.
Other points to note:
- Production readiness – timeline and delivery remain on track to previously agreed dates. The progression or any delay of the Payday Bills will not push any of these timeframes further.
- Funds were encouraged to move to NPP sooner to get familiar with the change, and to respond to any implementation issues while the volumes are lower, and funds have more time to resolve them under the quarterly regime.
- The final SuperStream documents to provide the remaining information about testing and transition will be published by the end of November.
- Key message for industry regarding delivery time frames – 'don’t wait and don’t be late!'.
- STP changes will be discussed at future SAG meetings, with the changes summarised as STP is being updated to include a new code for QE, which will be required to be reported by employers from 1 July 2026.
- EVTE will be available from December for DSPs to test this change.
Payday Super – negative MATS
Under the Payday Super legislation, payment of qualifying earnings (QE) to an employee will, give rise to a liability for the employer to make a super contribution on their employee’s behalf.
Such contributions are usually to be received by the fund within 7 business days (of the payment of the QE). Contributions will be allocated against the earliest period with a liability, based on the order in which they were received by the employee’s fund.
Contributions made after a particular period’s due date will be ‘late’ contributions for that period.
Funds may use a negative member account transaction service (MATS) to reduce the value of contributions.
As there is no direct link between a negative MATS and the contribution it is reducing, business rules have been developed in line with sections 5.20 and 5.22 of the MATS Business Implementation Guide.
These business rules can be summarised as:
- A negative MATS will offset the contribution with the same effective date as the negative MATS.
- Where there is no contribution with the same effective date, or where the value of the negative MATS exceeds the contribution with that effective date, the negative MATS will offset the next most-recent contribution (that is, the preceding contribution).
- This process will continue until the entire value of the negative MATS is offset, or there are no more contributions within that financial year.
Better targeted super concessions
On 13 October the government announced changes to the better targeted super concessions measure. A fact sheet providing an overview of the proposed changes was released, with further consultation also planned. Treasury will release further details in due course. As such the information below is limited to what has already been announced.
- Changing the start date to 1 July 2026, with first assessments issuing in the 2027–28 financial year.
- Introducing a second threshold to better target super concessions on balances above $10 million.
- The $3 million threshold will be indexed in $150,000 increments aligned with the transfer balance cap.
- The $10 million threshold will be indexed in $500,000 increments aligned with transfer balance cap.
- Moving to a realised earnings approach that aligns to existing income tax concepts.
- There will be a 2-tiered approach to the tax rates for large balances
- 30% on the proportion of earnings corresponding to total super balance (TSB) between the lower threshold ($3 million) and the higher threshold ($10 million)
- 40% on the proportion of earnings corresponding to TSBs above the higher threshold ($10 million).
Based on the latest announcement:
- The ATO will calculate an individual’s TSB as we do every year.
- The ATO will contact funds that have members impacted by the measure and ask for their realised earnings. Funds will calculate the earnings and the share attributable to the member and report it back to the ATO.
- Our early thoughts are that we will still use the request for information process previously designed for Australian Prudential Regulation Authority (APRA) funds but instead of getting funds to report contributions and withdrawals, they will report realised earnings.
- We are waiting further direction on what the changes are for the self-managed super fund annual return in relation to information we don't currently obtain.
- Funds realised earnings will be based on the taxable income adjusted for elements such as contributions and pension phase income. The members share of the fund's realised earnings will be based on existing reporting mechanisms, or on a fair and reasonable basis which the ATO will provide guidance.
The Government will further consult on:
- calculating the realised earnings and attribute to in-scope individuals
- extend the existing exemption for some judges to improve consistency across jurisdictions
- make additional changes necessary to ensure commensurate treatment is maintained for defined benefit members.
Superannuation on government funded parental leave pay
As discussed at the last meeting, we continue to progress the system build in conjunction with Services Australia. We have a memorandum of understanding (MOU) in place with Services Australia for the new data exchange. We are currently developing a new MOU for data reporting with the Department of Social Services, who are the lead agency.
Contribution user guide
A super news article Guidance for funds on preparing for paid parental leave superannuation contribution (PPLSC) has now been published and is live in the Super funds newsroom.
Fund nomination process
The fund nomination process for individuals is not changing, however where there is not a specific member nomination for PPLSC, ATO systems will identify an eligible destination based on the hierarchy prescribed in the PPL rules. However, if no specific nomination has been made, the most likely scenario is that it will go to the fund with the largest number of contributions. If no fund is available or nominated, payment will go to the superannuation holding account. Refer to Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Rules 2025External Link.
Member notification
The ATO will send correspondence to the PPLSC recipient when PPLSC has been paid, which will include the amount and the relevant calculation components. Services Australia will not be providing the payment advice for PPLSC. Services Australia will only provide recipients the current existing correspondence advising details of the Parental Leave Payment (PLP).
Commencement
Initial PPLSC payments for 2025–26 PLP amounts are scheduled to commence following both ATO and Services Australia system deployments from July 2026. However, as this is a new data set which will require extensive testing, it is likely payments may continue into August 2026.
Going forward, from July each financial year there will be a large file containing the bulk of PPLSC payments to be issued for the previous financial year amounts, that is, July 2027 will be PPLSC amounts for 2026–27. The ATO will also receive small weekly files from Services Australia, which may result in additional payments or amendments throughout the year.
Other business
General feedback was that at present APRA funds had no capacity outside of preparing for Payday Super, system builds for SuperStream changes and better targeted super concessions.