PayDay Super & July 2026

From 1 July 2026, the system for mandatory employer superannuation contributions (SG system) will move from a quarterly in arrears payment arrangement to a PayDay arrangement – where the employer contribution must (subject to limited exceptions) be made within seven days of the payment of the employee’s wages and salary.  It seems many employers will make their PayDay SG contributions on the same day as their wages/salary runs.

For superannuation funds – rather than receiving 4 employer contributions per year, they will now receive and have to process 12 or 26 payments a year.  Additionally, the SG system will move from the employer contribution based upon “ordinary time earnings” to slightly broader system based upon “Qualifying Earnings”.

However, in July 2026, many employers may have to make, under the quarterly system which operated until 1 July 2026, the June 2026 Quarterly SG payment (which must be made on or before 28 July 2026) and the first PayDay SGT payments which could be in mid-July (if monthly pay run) or two payments, one in the second week of July and another in the fourth week of July (if fortnightly pay runs). 

For members who are making personal contributions (for which they are intending to claim a taxation deduction) to maximise their concessional contributions, careful planning will be required to avoid over contributing in respect of the 2026/27 financial year.  

The member could be in the position where his employer is contributing super contributions of of $2,000 per month for each month in 2026/27 with the member intending to personally contribute $708 per month, such contributions being made by way of salary sacrifice with both payments being made at the same time.  In isolation this would not cause an issue as the total payments would be $32,496. 

However, the June Quarter 2026 SG payment will also be received by the super fund during July 2026.  Consequently, the total amount of concessional contributions will, for the 2026/27 financial year, be $34,496 thereby exceeding the concessional contributions cap by $1,996.  This may not normally be an issue as the excess concessional amount will be detected by the ATO and the ATO will issue an amended assessment for the member reducing his tax deduction for super contributions by $1,996 and treating the $1,996 as being included in the non-concessional contribution amount for the member in respect of the 2026/27 financial year. 

Now, consider that the member has no non-concessional contribution cap space in respect of the 2026/27 financial year.  In this case, the $1,996 will be subject to tax at the rate of 47%.

The situation of having excess non-concessional contributions could be avoided if the member either did not make salary sacrifice contributions for three months during the 2026/27 financial year or, immediately, request a release authority in respect of the excess concessional contributions once the ATO has detected the excess and issued a determination of the excess amount.