Payday Super has now been operating for almost three months, but there are still a few misunderstandings about how the new system works. As part of the Business Planning Hobart businesses need to stay on top of their obligations, it may be worth checking that your payroll and super processes aren’t relying on one of these common myths.
The Australian Taxation Office (ATO) recently published its own Payday Super myth-busting update, highlighting four areas that could potentially catch employers out.
Myth 1: If I don’t report it through STP, Payday Super doesn’t apply
Unfortunately, not reporting something doesn’t make the obligation disappear.
Under Payday Super, employers need to report both qualifying earnings and super liability amounts through Single Touch Payroll (STP), along with the usual payroll information such as salaries, wages and PAYG withholding.
If you haven’t yet started reporting qualifying earnings and super liability amounts, the ATO says you should begin doing so as soon as possible and make sure the correct year-to-date figures are included in your first lodgment.
There’s currently some breathing room: the ATO says you don’t need to request an STP deferral if you can start reporting qualifying earnings during the 2026–27 financial year. However, from 1 July 2027, reports that don’t include qualifying earnings and super liability amounts may be rejected and penalties may apply.
Myth 2: If I miss a super payment, I’ll just fix it next payday
This one could become expensive.
If the correct super amount isn’t paid on time and to the correct fund, you may become liable for the Superannuation Guarantee Charge (SGC).
The important message from the ATO is to act quickly. If you miss a payment, pay the outstanding amount to the employee’s super fund as soon as possible. Even making a partial payment can reduce the SGC you may ultimately have to pay.
Myth 3: Payday Super changed who I need to pay super for
It hasn’t.
Payday Super changed how often super is paid, not which workers are eligible for super.
Depending on your payroll cycle, you may now be making super payments weekly, fortnightly or monthly. The existing rules determining which employees and eligible contractors must receive super continue to apply.
So, if you’re uncertain whether someone working for your business is entitled to super, don’t assume Payday Super has changed the answer.
Myth 4: If I pay within seven business days, I’m on time
Here’s the one particularly worth watching.
The seven-business-day rule relates to when the super fund receives the payment, not when you press the button to send it.
Generally, the employee’s super fund must receive the contribution within seven business days after payday. Leaving payment until the end of that period could therefore create problems if processing is delayed or a payment is rejected.
And according to the ATO, there are no extensions simply because a super fund rejects the payment.
Don’t Let a Payday Super Myth Catch You Out
Payday Super has changed an established business routine, so it’s understandable that there may still be some confusion while employers and payroll systems adjust.
But three months into the new system, now is a good time for Hobart businesses to check that their payroll procedures, STP reporting and super payment timing are working as intended.
A small misunderstanding today could potentially become an unwanted SGC liability tomorrow.
You can read the ATO’s full “Busting Payday Super myths” article and find further Payday Super guidance on the ATO website.
And if you’re unsure how Payday Super applies to your business, talk to your accountant before a myth turns into an expensive mistake.
Remember, this article is general in nature and doesn’t take into account your specific objectives, financial situation, or needs.
For advice tailored to your circumstances, have a chat with us at Hills Accounting Hobart.
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