From 1 July 2026, employees will see their superannuation guarantee (SG) contributions paid to their superannuation fund earlier with the introduction of the new Payday Super rules. Broadly, employers will be required to pay SG contributions at the same time they pay employees’ wages or salaries from 1 July 2026. This new framework replaces the existing quarterly system, under which employers had 28 days after the end of each quarter to make SG payments.

While employees will largely welcome this, there are some traps to watch out for during the initial transitional period.

Key Payday Super changes

Under the new Payday Super regime, SG contributions must generally be paid and received by the employee’s nominated super fund within seven business days of payday. This is a move away from the quarterly payment requirement, which will be in place up until 30 June 2026.

Timing risks for concessional contributions

Due to the transition, employees’ superannuation funds may receive cash from the June 2026 quarter’s superannuation contributions, as well as the cash through to and including the June 2027 quarter, all (or mostly all) within the 2027 financial year. Where this occurs, there is a risk that employees may breach their maximum concessional superannuation contribution caps. This may mean part of their concessional superannuation contribution is taxed at 47%, rather than the concessional rate of 15%.

The Government has stated that they will issue amendments to ensure that breaches to concessional caps do not occur for this reason, but we have not yet seen any legislation or official guidance to this effect yet. Thus we recommend clients that are at risk of breaching their concessional caps due to the transitional arrangements to keep an eye on their superannuation accounts, and reach out to your Pilot advisor if they are worried about breaches in the meantime.

Which employees are affected by Payday Super?

Whilst most employees will be affected by the new Payday Super rules in some way, the risk of breaching concessional contribution caps will largely only impact those individuals earning high wages, and/or paying in extra concessional contributions (e.g. via salary sacrificing or after-tax lump sum contributions). It is not expected that non-concessional contributions will be impacted, including after-tax contributions where tax deductions are not elected.

Broadly, the maximum that an individual can contribute into their superannuation account to access the concessional tax rate of 15% each financial year is capped. This cap is currently set at $30,000 per year, going up to $32,500 from 1 July 2026. This excludes any potential unused carried-forward caps that could be accessed.

For individuals where contributions to superannuation are already near or at the concessional contribution cap, it will be important to consider the timing of superannuation contributions. Employers may, before 30 June, move to more frequent payments, such as from quarterly to monthly, monthly to weekly, or anything in between.

How concessional contributions caps work

Notably, it is the cash that enters the superannuation fund that counts towards the concessional cap. So essentially, if an employer used to pay SG less often than wages, it is likely the 2027 concessional cap of $32,500 may be breached, as illustrated in the following table, where the cash received in the 2027 financial year totals $37,500.

Where an employer currently pays SG quarterly, the cash for the June quarter would fall into the concessional cap for the following financial year. This generally doesn’t cause any issues, as the rolling quarterly payments tend to spread out the cash and the concessional contribution caps are not breached: the June 2026 payment falls into the 2027 year, but the June 2027 payment falls into the 2028 year, and so on. But an employer moving to monthly Payday Super in this case would mean that both the June 2026 and June 2027 cash land in the same financial year, and thus counting towards the same annual concessional cap.

How breaching your cap can cost you

Continuing with the above example, an employee receives $7,500 per quarter in concessional contributions from their employer. Under the current system, the employer pays within 28 days after the end of each quarter, so the superannuation fund receives the $7,500 cash from the June 2025, September 2025, December 2025 and March 2026 quarters in the 2026 financial year – totalling $30,000 in line with the concessional contributions cap.

The superannuation fund then receives the $7,500 cash from the June 2026 quarter in the 2027 financial year, but also receives the September 2026, December 2026, March 2027 and June 2027 quarters in the same year (under the new Payday Super rules). This is because the employer switched from quarterly for the June 2026 quarter, to paying on payday for the remaining quarters. The superannuation fund has now received five lots of $7,500 concessional contributions, totalling $37,500 and breaching the concessional contributions cap for the year. The excess contributions over the cap will be taxed at 47% rather than 15%, meaning an extra $1,600 of income taxes.

The same issue may also occur in the 2026 financial year where an employer adopts Payday Super earlier and makes payments during the June 2026 quarter rather than afterwards as they normally would. Thus, the SG that would normally have been paid in the 2027 financial year, instead lands in the 2026 financial year. The usual “rolling” on of payments stops here, and so five quarterly payments land in 2026 (rather than four quarterly payments).

While this isn’t a new issue, having been something to consider when changes in employment or restructures have occurred, it now has the potential to have a wider impact due to the Payday Super introduction. Employees across the board have been put on notice to be aware of the issues here and to be prepared.

Why the Payday Super Reform matters for employees

The reform is broadly intended to reduce unpaid or underpaid superannuation and aiming for better and earlier detection and management of such issues. Although it is quite a significant shift in cashflow and payroll management for businesses, at its core the reform is there to support and protect employees.

For the most part, employees will welcome this change as it will result in the cash being invested in the employee’s superannuation fund earlier, rather than what can sometimes be a delay in up to four months before superannuation funds receive the cash.

It is also envisaged that by having more frequent payments, employees may track their superannuation more regularly and can report any unpaid or underpaid superannuation earlier. It is always a good idea to keep an eye on what your employer is paying into your superannuation fund and reach out to a trusted advisor if you are concerned you are not receiving your entitlements correctly.

Payday Super Compliance: What employees must do to prepare

1.Check to see what your concessional contributions are likely to be

Check to see what your concessional contributions currently are per year – this includes SG from your employer, any pre-tax salary sacrificed amounts deducted from your wages, and any post-tax contributions you pay into the fund (for which you elect to use as a tax deduction). Consider also any foreseeable changes to your employment, such as promotions, pay rises, or change in roles/employers.

The concessional contribution cap is $30,000 for the 2026 financial year, and $32,500 for the 2027 financial year. Also consider if you have any carried-forward caps available.

Estimate whether your concessional contributions for the 2027 financial year are likely to be close to this cap ($32,500). In particular, consider if you might breach the cap if there were to be cash from 2026 (pre-Payday Super) falling into the 2027 financial year.

Do similar checks too for the 2026 financial year. Consider if the total cash received by your fund will exceed $30,000 if it were to include all of June 2026’s concessional contributions, as well as anything your fund has already received that relates to the 2025 financial year.

2.Check when your employer pays superannuation

Find out when your employer pays superannuation currently and consider what it will look like going forward.

Your employer may already be paying your superannuation on payday, in which case you will unlikely be impacted by the changes. However, if not, there may be a timing issue to consider when the Payday Super regime comes into effect. Any change in payment frequency should be examined.

3.Plan ahead

If you are close to the concessional contributions cap and there will be a timing change for you (either from 1 July 2026, or early adoption before 30 June 2026), we suggest reaching out to your employer or your Pilot advisor to discuss how this can be managed.

If you are paying contributions yourself and electing for these to be deductible for you, it may be as simple as adjusting the timing of these contributions once you have worked out when all the various cash concessional contributions are likely to land. Consider whether it is appropriate for you to reach out to an advisor to discuss the timing and associated implications.

It is also a good idea to keep this in mind in case of any changes to your employment. A new job may mean these rules end up impacting you, both during this transitional period, but also going forward.

Transitional measures being discussed

Whilst the Government is aware of this issue and has indicated it is considering introducing a transitional measure, nothing has yet been officially released. Thus, while we await further details regarding these transitional measures, we recommend reviewing your situation to see what can be done to minimise impacts to you, and being aware of the upcoming changes.

Contact Pilot

If you would like our assistance in reviewing your concessional contributions caps or have any concerns surrounding your superannuation, please contact Kylee Smith, Kristy Baxter or your Pilot Advisor on (07) 3023 1300.