Payday super rules to slam companies with manual payroll processes

From 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages, and face penalties if contributions do not arrive in employee super funds within 7 days.

Riley James, CEO and founder of employee onboarding software provider Xonboard, has said that industries with a greater proportion of short-term staff would see a greater compliance burden once the payroll super rules take effect.

“Anyone with a significant amount of turnover is going to be more impacted by this, because they're going to go through that cycle of having to collect an employee's details more regularly,” James said.

He added that businesses which use manual processes to onboard employees could see snags when adapting to the incoming payday super requirements.

The process of transposing employee information from paper documents such as TFN forms and the super choice form can introduce errors which may prove problematic once payday super laws take effect, James warned.

“That is where a lot of the errors come from. It's people transposing them from one document into another system. And typos, reading people's handwriting incorrectly, or they just never get the forms back,” he explained.

“Any business that hasn't automated all of that stuff is going to find it challenging to move to this faster payment process around payday super.”

While James said that the transition could be rough for some businesses, the payday super laws would ultimately give companies a better idea of their financial standing, and likely achieve its goal of reducing the underpayment and late payment of employee super.

“At present, if things are not going well, [businesses] can delay the superannuation payment for three or four months. And I'm sure there's a lot of businesses that don't realize the situation they're in until superannuation rolls around,” James explained.

“By rolling superannuation into the same salary and wages payment you make each week or every fortnight, businesses are going to have a clearer picture of how things are actually traveling.

“You don't end up with these very large superannuation payments that don't get paid because the business ultimately goes out of business before it has a chance to resolve that.”

James warned that the window for errors would be much smaller under the payday super laws, with penalties applying when payment doesn’t reach an employee’s super account within 7 days of their wage payments.

He underscored the importance of smoothing out errors during the employee onboarding process, to avoid mistakes that could delay super payments and bring on penalties under the new payday super requirements.

“With the seven day period to get the payments to the super funds, three or four of those days could be taken up by a refund coming back to you,” James said.

“If you're waiting until payday to realize you don't actually have this employee's details … you've basically run out of time already. So it needs to be automated, and it needs to happen up front, ahead of payday, which makes sense to do it in employee onboarding.”

James said that businesses that pre-empted the changes and ensured their super payment processes were error-free would see the smoothest transition to the payday super requirements.

“If you embrace this as an opportunity to automate a whole bunch of processes, which might make your payroll team more efficient, and enable you to onboard staff quicker … then you can get the benefits immediately, without the potential penalties that will happen after this is legislated,” James said.

“If you implement it today, when you make a mistake, there are no penalties. So it's a good opportunity for businesses to get the benefits today without the penalties.”