Payday Super transition relief: update for employers and employees
Payday Super started on 1 July 2026, requiring employers to pay superannuation guarantee (SG) contributions for each payday rather than quarterly.
The transition created an unexpected problem.
Under superannuation rules, concessional contributions generally count towards a person's annual cap in the financial year the superannuation fund receives the contribution.
As a result, superannuation contributions relating to the final quarter of the 2025-26 financial year could have been paid in July 2026 and counted towards the 2026-27 financial year. For some employees, this would have meant an additional quarter of employer contributions being counted alongside their normal 2026-27 contributions.
Those already making salary sacrifice contributions or receiving larger employer contributions may have faced the risk of exceeding their concessional contributions cap.Â
The Bill proposes targeted relief for eligible transition-period contributions. The measure is intended to prevent the change from quarterly super to Payday Super from creating an excess concessional contributions amount for 2026–27.
Under the proposal, certain concessional contributions relating to the June 2026 quarter that are paid in July 2026 will be excluded when calculating an individual's concessional contributions for the 2026-27 income year.
The measure focuses specifically on the transition period rather than providing a broad increase to contribution caps.
This approach is designed to ensure employees are not disadvantaged simply because of the change in the timing of employer super payments.
Most employees are unlikely to be affected.
The greatest impact is likely to be for people who:
The legislation provides greater certainty for these employees and reduces the likelihood of receiving an excess concessional contributions assessment caused solely by the Payday Super transition.
Even with the relief available, it is worth reviewing your contribution strategy if you regularly make additional concessional contributions throughout the year.
While the change provides welcome relief, employers still need to understand how Payday Super affects payroll and superannuation processes.
Employers should be prepared to answer employee questions about:
The legislation does not increase the concessional contributions cap to account for Payday Super. Instead, it excludes certain eligible transition-period contributions from the cap calculation.
The ordinary concessional contributions cap continues to apply.
For the 2026-27 income year, the concessional contributions cap is $32,500. This cap includes employer SG contributions, salary sacrifice amounts and most personal contributions claimed as a tax deduction.
For individuals who make additional contributions to super throughout the year, tracking total concessional contributions remains important, particularly where multiple contribution sources exist.
What counts towards the concessional contributions cap?
| Contribution type | Counts towards the cap? |
| Employer SG contributions | Yes |
| Salary sacrifice contributions | Yes |
| Personal deductible contributions | Yes |
| Non-concessional contributions | No |
Employers still need to pay the final quarterly SG contribution for the quarter ending 30 June 2026 by 28 July 2026. Contributions received by the fund from 1 July to 28 July 2026 are first allocated to the June 2026 quarter obligation. Payday Super applies to qualifying earnings paid from 1 July 2026, with contributions generally due in the employee’s fund within seven business days after payday.
For employers, now is a good time to review payroll processes and ensure teams understand how the new system operates.
For employees making additional superannuation contributions, it is worth checking your expected contributions for the year and seeking advice if you are likely to approach your available cap.
Payday Super is the requirement for employers to pay super guarantee contributions for each payday rather than quarterly. It applies from 1 July 2026.
Contributions generally need to reach the employee’s super fund within seven business days after payday. Limited exceptions apply, including longer timeframes for some new employees.
The final quarterly contribution for April to June 2026 may be received in July 2026. Without relief, it could be counted in 2026–27 alongside regular Payday Super contributions, increasing the risk that some employees exceed their cap.
Employees who salary sacrifice, make personal deductible contributions, receive larger employer contributions or are close to their available cap should review their expected contributions.
No. The proposed measure excludes certain eligible transition-period contributions from the 2026–27 cap calculation. The general concessional contributions cap for 2026–27 remains $32,500.
Employers should confirm that payroll and payment processes can meet the new timeframes, check employee and fund data, plan for the final June 2026 quarterly payment, and prepare to answer employee questions about the changeover.
Payday Super changes the timing of employer contributions and creates new payroll deadlines. The proposed transition relief may protect affected employees from an excess concessional contributions outcome, but employers and employees still need to monitor payments and contribution totals.
Our advisors can help employers prepare payroll processes for Payday Super and help employees review salary sacrifice or personal contribution strategies against their available cap.
Get in touch with your local Boyce office to discuss your superannuation and payroll obligations.
Belinda Williams has more than 25 years of experience in the accounting and financial planning industries in both advice and management roles. As Head of Superannuation at Boyce, Belinda is committed to building lasting relationships and ensuring clients receive the highest standard of service, self-managed super fund (SMSF) compliance and strategic guidance.
